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Prabhat Dairy Limited (NSE:PRABHAT), which is in the food 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. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Prabhat Dairy’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Prabhat Dairy
Is Prabhat Dairy still cheap?
Great news for investors – Prabhat Dairy is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is ₹100.09, but it is currently trading at ₹54.15 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Prabhat Dairy’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.
Can we expect growth from Prabhat Dairy?
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. In the upcoming year, Prabhat Dairy’s earnings are expected to increase by 53%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since PRABHAT 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 PRABHAT for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PRABHAT. 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 buy.