Today we’re going to take a look at the well-established Intact Financial Corporation (TSX:IFC). The company’s stock had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of CA$95.49 to CA$104.15. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Intact Financial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Intact Financial
What is Intact Financial worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2% above my intrinsic value, which means if you buy Intact Financial today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CA$94.92, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Intact Financial’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Intact Financial?
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. Intact Financial’s earnings over the next few years are expected to increase by 39.36%, 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? It seems like the market has already priced in IFC’s positive outlook, 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 the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on IFC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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 Intact Financial. You can find everything you need to know about Intact Financial in the latest infographic research report. If you are no longer interested in Intact Financial, 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.