When Should You Buy Wajax Corporation (TSE:WJX)?
Wajax Corporation (TSE:WJX), is not the largest company out there, but it received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$32.08 at one point, and dropping to the lows of CA$26.43. 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 Wajax's current trading price of CA$28.43 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 Wajax’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 Wajax
Is Wajax Still Cheap?
Great news for investors – Wajax is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is CA$39.79, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Wajax’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Wajax look like?
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. 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. However, with a relatively muted revenue growth of 5.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Wajax, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since WJX is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on WJX for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WJX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
If you want to dive deeper into Wajax, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Wajax (2 are significant) you should be familiar with.
If you are no longer interested in Wajax, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
