While SH Kelkar and Company Limited (NSE: SHK) may not be the most well-known stock right now, it has garnered a lot of attention due to a substantial increase in NSEI prices over the course of the last few months. With many analysts covering the stock, we can expect any price sensitive announcement to have already factored into the stock price. However, what if the stock is still a good deal? Today I will analyze the most recent data on the outlook and valuation of SH Kelkar to see if the opportunity still exists.
Check out our latest analysis for SH Kelkar
What is SH Kelkar worth?
Good news, investors! SH Kelkar is still a good deal at the moment under my multiple pricing model, which compares the company’s price / earnings ratio to the industry average. 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 15.11x is currently well below the industry average of 21x, meaning it is trading at a lower price than its peers. What is more interesting is that the SH Kelkar stock price is quite stable, which could mean two things: First, it may take a while for the stock price to get closer to its peers in the sector, and secondly, there may be less chance of buying low in the future once it reaches this value. Indeed, the action is less volatile than the market in the broad sense given its low beta.
What kind of growth will SH Kelkar generate?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s take a look at the future expectations of the business as well. With earnings expected to grow by 30% over the next two years, the future looks bright for SH Kelkar. It looks like a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What this means for you:
Are you a shareholder? Since SHK is currently below the industry PE ratio, maybe now is a great time to build up more of your holdings in inventory. With optimistic prospects on the horizon, it seems that this growth has not yet been fully reflected in the share price. However, there are also other factors such as the capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you have been keeping an eye on SHK for a while, it may be time to enter the stock. Its optimistic future earnings outlook is not yet fully reflected in the current share price, which means it is not too late to buy SHK. But before making any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
If you are interested in learning more about SH Kelkar as a business, it is important to be aware of the risks it faces. You would be interested to know that we have found 3 warning signs for SH Kelkar and you will want to know them.
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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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