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Old Republic International Corporation (NYSE:ORI), which is in the insurance business, and is based in United States, saw a decent share price growth in the teens level on the NYSE over the last few months. As a US$6.6b market cap stock, it seems odd Old Republic International is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today I will analyse the most recent data on Old Republic International’s outlook and valuation to see if the opportunity still exists.
What's the opportunity in Old Republic International?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.9% below my intrinsic value, which means if you buy Old Republic International today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $22.88, then there’s not much of an upside to gain from mispricing. In addition to this, Old Republic International has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Old Republic International look like?
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 Old Republic International, it is expected to deliver a relatively unexciting earnings growth of 0.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Old Republic International, at least in the near term.
What this means for you:
Are you a shareholder? ORI’s 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 financial strength of the company. 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 ORI, now may not be the most advantageous 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 Old Republic International. You can find everything you need to know about Old Republic International in the latest infographic research report. If you are no longer interested in Old Republic International, 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 firstname.lastname@example.org. 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.