Mercator Medical SA. (WSE:MRC), a medical equipment company based in Poland, saw significant share price volatility over the past couple of months on the WSE, rising to the highs of PLN19.35 and falling to the lows of PLN16. 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 Mercator Medical’s current trading price of PLN16 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Mercator Medical’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 Mercator Medical
What is Mercator Medical worth?
Good news, investors! Mercator Medical is still a bargain right now. According to my valuation, the intrinsic value for the stock is PLN53.94, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Mercator Medical’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will Mercator Medical generate?
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. With revenues expected to grow by 42.71% over the next couple of years, the future seems bright for Mercator Medical. If the level of expenses is able to be maintained, 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? Since MRC is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MRC 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 MRC. 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 investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Mercator Medical. You can find everything you need to know about Mercator Medical in the latest infographic research report. If you are no longer interested in Mercator Medical, you can use our free platform to see my list of over 50 other stocks with a high growth potential.