Is There Now An Opportunity In Alamo Group Inc. (NYSE:ALG)?

While Alamo Group Inc. (NYSE:ALG) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$190 and falling to the lows of US$158. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Alamo Group's current trading price of US$161 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Alamo Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Our free stock report includes 1 warning sign investors should be aware of before investing in Alamo Group. Read for free now.

What's The Opportunity In Alamo Group?

Great news for investors – Alamo Group is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $223.50, but it is currently trading at US$161 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Alamo Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

See our latest analysis for Alamo Group

Can we expect growth from Alamo Group?

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. 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 a double-digit 20% over the next couple of years, the outlook is positive for Alamo Group. 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 ALG is currently undervalued, it may be a great time to increase 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 ALG 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 ALG. 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 buy.

So while earnings quality is important, it's equally important to consider the risks facing Alamo Group at this point in time. In terms of investment risks, we've identified 1 warning sign with Alamo Group, and understanding it should be part of your investment process.

If you are no longer interested in Alamo Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.