When Should You Buy Continental Building Products, Inc. (NYSE:CBPX)?
Continental Building Products, Inc. (NYSE:CBPX), which is in the building business, and is based in United States, saw significant share price movement during recent months on the NYSE, rising to highs of $30.53 and falling to the lows of $24.35. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Continental Building Products’s current trading price of $25.04 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Continental Building Products’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Continental Building Products
What’s the opportunity in Continental Building Products?
According to my valuation model, Continental Building Products seems to be fairly priced at around 16% below my intrinsic value, which means if you buy Continental Building Products today, you’d be paying a fair price for it. And if you believe the company’s true value is $29.67, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Continental Building Products’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Continental Building Products generate?
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 the company’s future expectations. Though in the case of Continental Building Products, it is expected to deliver a relatively unexciting earnings growth of 3.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in CBPX’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on CBPX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 Continental Building Products. You can find everything you need to know about Continental Building Products in the latest infographic research report. If you are no longer interested in Continental Building Products, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
