Spectrum Brands Holdings, Inc. (NYSE:SPB), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. While good news for shareholders, the company has traded much higher in the past year. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. But what if there is still an opportunity to buy? Let's examine Spectrum Brands Holdings's valuation and outlook in more detail to determine if there's still a bargain opportunity.
Check out our latest analysis for Spectrum Brands Holdings
What Is Spectrum Brands Holdings Worth?
Great news for investors – Spectrum Brands Holdings is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $118.34, but it is currently trading at US$76.25 on the share market, meaning that there is still an opportunity to buy now. However, given that Spectrum Brands 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.
Can we expect growth from Spectrum Brands Holdings?
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. However, with a relatively muted revenue growth of 1.8% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Spectrum Brands Holdings, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since SPB is currently undervalued, it may be a great time to increase your holdings in the stock. 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 SPB for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy SPB. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
So while earnings quality is important, it's equally important to consider the risks facing Spectrum Brands Holdings at this point in time. Every company has risks, and we've spotted 1 warning sign for Spectrum Brands Holdings you should know about.
If you are no longer interested in Spectrum Brands Holdings, 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.