Arc Logistics Partners LP (NYSE:ARCX), an energy company based in United States, saw a decent share price growth in the teens level on the NYSE 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, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on ARCX’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Arc Logistics Partners
What's the opportunity in ARCX?
Good news, investors! ARCX is still a bargain right now. According to my valuation, the intrinsic value for the stock is $33.51 which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, ARCX’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because ARCX’s stock is less volatile than the wider market given its low beta.
Can we expect growth from ARCX?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares.Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at ARCX future expectations. However, with a negative profit growth of -2.33% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for ARCX. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although ARCX is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to ARCX, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on ARCX for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Arc Logistics Partners. You can find everything you need to know about ARCX in the latest infographic research report. If you are no longer interested in Arc Logistics Partners, 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.