Is It Too Late To Consider Buying Lincoln Electric Holdings, Inc. (NASDAQ:LECO)?
Lincoln Electric Holdings, Inc. (NASDAQ:LECO), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$146 and falling to the lows of US$131. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Lincoln Electric Holdings' current trading price of US$132 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lincoln Electric Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Lincoln Electric Holdings
What's the opportunity in Lincoln Electric Holdings?
Good news, investors! Lincoln Electric Holdings is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $189.15, but it is currently trading at US$132 on the share market, meaning that there is still an opportunity to buy now. However, given that Lincoln Electric Holdings’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Lincoln Electric Holdings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 78% over the next couple of years, the future seems bright for Lincoln Electric Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since LECO is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LECO for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LECO. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
So while earnings quality is important, it's equally important to consider the risks facing Lincoln Electric Holdings at this point in time. Case in point: We've spotted 2 warning signs for Lincoln Electric Holdings you should be aware of.
If you are no longer interested in Lincoln Electric Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
