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At NZ$06.3, Is Metlifecare Limited (NZSE:MET) A Buy?

Metlifecare Limited (NZSE:MET), a healthcare company based in New Zealand, saw a decent share price growth in the teens level on the NZSE over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Metlifecare’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Metlifecare

Is Metlifecare still cheap?

According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Metlifecare’s ratio of 9.36x is trading slightly below its industry peers’ ratio of 9.39x, which means if you buy Metlifecare today, you’d be paying a fair price for it. And if you believe Metlifecare should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Metlifecare’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What kind of growth will Metlifecare generate?

NZSE:MET Future Profit June 22nd 18
NZSE:MET Future Profit June 22nd 18

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Metlifecare’s earnings over the next few years are expected to increase by 35.50%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? MET’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at MET? Will you have enough conviction to buy should the price fluctuates below the true value?

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Are you a potential investor? If you’ve been keeping tabs on MET, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for MET, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Metlifecare. You can find everything you need to know about Metlifecare in the latest infographic research report. If you are no longer interested in Metlifecare, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.