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Near a Growth Buy: Innospec Inc (NASDAQ:IOSP)
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Innospec Inc. (NASDAQ:IOSP) [Trend Analysis] looks like it may offer some good growth and value to investors interested in the stock. From a growth perspective, if growth estimates are lifted marginally, the stock will be underpriced, plus investors should keep in mind that IOSP is offering a dividend yield of about 1.2%.
Innospec Inc. (NASDAQ:IOSP) last traded at $45.30 after moving up 2.07% for the trading day.
IOSP is trading with a trailing 12 month P/E multiple of 13.36 and an estimated forward P/E multiple of 12.30. The stock has an estimated 5 year annual growth of 11.52% and a PEG multiple of 1.16.
From a value investor perspective, as mentioned Innospec Inc. trades on an estimated forward P/E multiple of 12.30. The current estimated forward P/E ratio for the market as a whole is approximately 19.00. Therefore, for value investors IOSP appears to be underpriced.
For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of Innospec Inc. (NASDAQ:IOSP). This PEG multiple takes into account the expected long term growth in earnings of Innospec Inc. rather than merely the growth for one full earnings period ahead.
As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of IOSP being 1.16, we consider Innospec Inc. to likely be priced at fair value.
The mean analyst 12 month target price for Innospec Inc. (NASDAQ:IOSP) is currently $47.50 or 4.86% above the current price. Additionally, the stock has been as high as $46.91 and as low as $35.00 in the last 52 weeks. Analysts are estimating that IOSP will report earnings per share of $0.68 next quarter.
