Should you investigate Century Plyboards (India) Limited (NSE: CENTURYPLY) at 411?
Century Plyboards (India) Limited (NSE: CENTURYPLY), may not be a large cap stock, but it has received a lot of attention due to a substantial increase in NSEI prices in recent months. With many analysts covering the stock, we can expect any price sensitive announcement to have already factored into the stock price. But what if there is still an opportunity to buy? Let’s take a closer look at the valuation and outlook for Century Plyboards (India) to determine if there is still an opportunity to trade.
See our latest review for Century Plyboards (India)
What is Century Plyboards (India) worth?
According to my multiple price model, where I compare the company’s price / earnings ratio to the industry average, the stock currently looks expensive. I used the price / earnings ratio in this case because there is not enough visibility to forecast its cash flow. The stock’s ratio of 64.4x is currently well above the industry average of 15.32x, meaning it is trading at a higher price relative to its peers. But is there another opportunity to buy low in the future? Since Century Plyboards (India) stock is quite volatile (i.e. its price movements are amplified relative to the rest of the market), this could mean that the price may go down, giving us a another chance to buy in the future. This is based on its high beta, which is a good indicator of stock price volatility.
What does the future of Century Plyboards (India) look like?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. While value investors argue that intrinsic value versus price matters most, a more compelling investment thesis would be high growth potential at a cheap price. Century Plyboards (India) profits over the next few years are expected to double, indicating a very optimistic future. This should lead to greater cash flow, fueling a higher value of the stock.
What this means for you:
Are you a shareholder? CENTURYPLY’s bullish future growth appears to have been factored into the current stock price, with stocks trading above industry price multiples. At this current price, shareholders may ask a different question: should I sell? If you think CENTURYPLY should trade below its current price, sell high and buy it back when its price drops to the industry PE ratio can be profitable. But before making that decision, check to see if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping your eye on CENTURYPLY for a while, it might not be the best time to enter inventory. The price has topped its industry peers, which means there is likely to be no more benefit from poor pricing. However, the positive outlook is encouraging for CENTURYPLY, which means it is worth exploring other factors in order to take advantage of the next price drop.
If you want to dive deeper into Century Plyboards (India), you will also take a look at the risks it currently faces. In terms of investment risks, we have identified 1 warning sign with Century Plyboards (India), and understanding it should be part of your investment process.
If you are no longer interested in Century Plyboards (India), you can use our free platform to view our list of over 50 other stocks with high growth potential.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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