The Manchester United stock has experienced serious volatility in the past week – particularly since Tuesday. The stock has climbed 62% as rumors swirl about the club being sold to a new owner.
While it may be tempting to buy into the hype and trade this stock, you’re going to want to see these 2 red flags VectorVest has uncovered first. Before we get to the detailed stock analysis, let’s talk about what the rumor mill is throwing around.
Manchester United announced that they will be looking for strategic alternatives to enhance the club’s growth. The club states that new investments and even a full-fledged sale are not off the table. Since then, the internet has taken this news and run with it. In fact, many sources are trying to pin down a specific investor that could be interested – such as David Beckham.
With that said, there is little other information at this time. A sale of this club would not take place anytime soon – as these are lengthy processes, and right now, there isn’t even an interested buyer according to public knowledge.
What we do know is that Manchester United would sell at a premium price. Is that price too high to bring in any real investors? Only time will tell. But as of Friday morning, the stock is still trending higher and higher – displaying a strong price trend in the right direction.
And, it couldn’t have come at a better time after a year of turmoil for the club. With peaks and valleys leading into the last week, the stock had lost 15% in the 12 months. But with the rally shown in the past few days, the stock is now up 42% in the past year – with no real signs of slowing down.
This begs the question – is now a good time to invest in MANU stock? Or, should you avoid the hype until more details come out and indicate a sale is actually on the table?
While we can’t provide any sort of insights into what MANU will do with their club, we can provide you with clear insights based on tried-and-true stock analysis. In fact, the VectorVest stock forecasting system has identified 2 major issues with the stock – despite the impressive price trend.
Very Poor Upside Potential vs Excellent Timing – Which Holds More Weight?
The VectorVest system simplifies trading by boiling down everything you need to know about a stock into three ratings. These are relative value (RV), relative safety (RS), and relative timing (RT). Interpreting these ratings is easy as they sit on a scale of 0.00-2.00. More importantly, VectorVest is able to provide you with a clear buy, sell, or hold recommendation based on these ratings. Here’s what’s happening with MANU right now:
- Very Poor Upside Potential: the RV rating of 0.12 is very poor on a scale of 0-2, and speaks to the long-term price appreciation potential of this stock three years out. Moreover, it’s way overvalued at the current price – with a current value of just $1.16.
- Poor Safety: An indicator of risk, the RS rating analyzes a stock’s financial consistency and predictability, debt-to-equity ratio, and business longevity. As for MANU, the RS rating of 0.60 is poor.
- Excellent Timing: This is where things get interesting, as there is no denying the strong price trend that has formed for MANU and the excellent RT rating of 1.99 reflects that. This rating takes a look at a trend day over day, week over week, quarter over quarter, and year over year. The rating analyzes the direction, dynamics, and magnitude of the trend to paint the full picture.
All of this works out to an overall VST rating of 1.28 – which is very good. But is this skewed by the RT rating – or is there really an opportunity here for you to trade the stock? You don’t have to play the guessing game or let emotion influence your decision-making. Get a free stock analysis here for a clear buy, sell, or hold recommendation based on the principles above.
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for MANU, it is overvalued with very poor upside potential, poor safety, and excellent timing.
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