Manhattan Bridge Capital Inc (NASDAQ:LOAN), a mortgage reits company based in United States, led the NasdaqCM gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Manhattan Bridge Capital’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for Manhattan Bridge Capital
Is Manhattan Bridge Capital still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% above my intrinsic value, which means if you buy Manhattan Bridge Capital today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $6.27, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like Manhattan Bridge Capital’s share price is quite stable, which could mean 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 Manhattan Bridge Capital?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. In the upcoming year, Manhattan Bridge Capital’s earnings are expected to increase by 23.94%, 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? LOAN’s optimistic future growth appears to have been factored into the current share price, 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 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 LOAN, 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 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 Manhattan Bridge Capital. You can find everything you need to know about Manhattan Bridge Capital in the latest infographic research report. If you are no longer interested in Manhattan Bridge Capital, 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.