We look at Amira Nature Foods Ltd. (NYSE:ANFI) [Trend Analysis] a company in the Food – Major Diversified industry currently at the attention of investors, to assess if it provides value for investors considering buying or selling it. Currently Amira Nature Foods Ltd. is trading at $2.84 after moving down -38.92% in the previous day of trading.
ANFI is trading with a trailing 12 month P/E multiple of 2.06 and an estimated forward P/E multiple of 1.54. The stock has an estimated 5 year annual growth of 20.60% and a PEG multiple of 0.10.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Amira Nature Foods Ltd. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of ANFI. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually 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 ANFI being 0.10, we consider Amira Nature Foods Ltd. to likely be underpriced.
This analysis means that value buyers who do not currently hold Amira Nature Foods Ltd. (NYSE:ANFI) should consider buying and investors currently holding the stock should continue holding.
The mean analyst 12 month target price for Amira Nature Foods Ltd. (NYSE:ANFI) is currently $8.00 or 181.69% above the current price. Additionally, the stock has been as high as $19.86 and as low as $2.51 in the last 52 weeks. Analysts are estimating that ANFI will report earnings per share of $0.28 next quarter.
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