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Genus Power Infrastructures Limited (NSE:GENUSPOWER), which is in the electronic business, and is based in India, saw a double-digit share price rise of over 10% in the past couple of months on the NSEI. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Genus Power Infrastructures’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Genus Power Infrastructures
What’s the opportunity in Genus Power Infrastructures?
Great news for investors – Genus Power Infrastructures is still trading at a fairly cheap price. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 8.31x is currently well-below the industry average of 19.33x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Genus Power Infrastructures’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Genus Power Infrastructures generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Genus Power Infrastructures’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since GENUSPOWER is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on GENUSPOWER 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 GENUSPOWER. 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.