At €18.60, Is Manitou BF SA (EPA:MTU) Worth Looking At Closely?

Manitou BF SA (EPA:MTU), which is in the machinery business, and is based in France, saw a decent share price growth in the teens level on the ENXTPA over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Manitou BF’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Manitou BF

Is Manitou BF still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17.28% above my intrinsic value, which means if you buy Manitou BF today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €15.86, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Manitou BF’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Manitou BF generate?

ENXTPA:MTU Past and Future Earnings, February 13th 2020
ENXTPA:MTU Past and Future Earnings, February 13th 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -8.7% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Manitou BF. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Currently, MTU appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on MTU for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on MTU should the price fluctuate below its true value.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Manitou BF. You can find everything you need to know about Manitou BF in the latest infographic research report. If you are no longer interested in Manitou BF, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.