Is Now An Opportune Moment To Examine Schweitzer-Mauduit International, Inc. (NYSE:SWM)?
Schweitzer-Mauduit International, Inc. (NYSE:SWM), which is in the forestry business, and is based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. Less-covered, small caps tend to present 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? Let’s take a look at Schweitzer-Mauduit International’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Schweitzer-Mauduit International
What's the opportunity in Schweitzer-Mauduit International?
Great news for investors – Schweitzer-Mauduit International is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $49.56, but it is currently trading at US$28.11 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Schweitzer-Mauduit International’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Schweitzer-Mauduit International look like?
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 25% over the next couple of years, the future seems bright for Schweitzer-Mauduit International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since SWM 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 SWM 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 SWM. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Schweitzer-Mauduit International. You can find everything you need to know about Schweitzer-Mauduit International in the latest infographic research report. If you are no longer interested in Schweitzer-Mauduit International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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