IDEX Corporation (NYSE:IEX) received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $135.57 at one point, and dropping to the lows of $123.23. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether IDEX’s current trading price of $134.74 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at IDEX’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for IDEX
What’s the opportunity in IDEX?
According to my valuation model, the stock is currently overvalued by about 41%, trading at $134.74 compared to my intrinsic value of $95.81. This means that the opportunity to buy IDEX at a good price has disappeared! But, is there another opportunity to buy low in the future? Since IDEX’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 IDEX generate?
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 41.75% over the next couple of years, the future seems bright for IDEX. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? IDEX’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe IDEX should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on IDEX for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for IDEX, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.