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When Should You Buy Information Services Corporation (TSE:ISV)?

Simply Wall St

Information Services Corporation (TSE:ISV), which is in the real estate business, and is based in Canada, saw its share price hover around a small range of CA$15.50 to CA$16.58 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Information Services’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Information Services

Is Information Services still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.9% below my intrinsic value, which means if you buy Information Services today, you’d be paying a fair price for it. And if you believe that the stock is really worth CA$17.30, then there’s not much of an upside to gain from mispricing. In addition to this, Information Services has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Information Services?

TSX:ISV Past and Future Earnings, October 11th 2019

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. Though in the case of Information Services, it is expected to deliver a relatively unexciting top-line growth of 6.0% over the next year, 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 ISV’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 an eye on ISV, 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 further examining 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 Information Services. You can find everything you need to know about Information Services in the latest infographic research report. If you are no longer interested in Information Services, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.