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Is It Too Late To Consider Buying Franklin Electric Co., Inc. (NASDAQ:FELE)?

Simply Wall St ·  11/07/2023 01:12

Franklin Electric Co., Inc. (NASDAQ:FELE), 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$98.82 and falling to the lows of US$84.00. 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 Franklin Electric's current trading price of US$87.54 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 Franklin Electric's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Franklin Electric

What Is Franklin Electric Worth?

The stock seems fairly valued at the moment according to my valuation model. It's trading around 6.24% above my intrinsic value, which means if you buy Franklin Electric today, you'd be paying a relatively reasonable price for it. And if you believe that the stock is really worth $82.40, then there isn't really any room for the share price grow beyond what it's currently trading. Furthermore, Franklin Electric's low beta implies that the stock is less volatile than the wider market.

What does the future of Franklin Electric look like?

earnings-and-revenue-growth
NasdaqGS:FELE Earnings and Revenue Growth November 6th 2023

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. 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. Franklin Electric'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? It seems like the market has already priced in FELE's positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you've been keeping an eye on FELE, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it's worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Diving deeper into the forecasts for Franklin Electric mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Franklin Electric, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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