Should You Buy Washington Trust Bancorp Inc (WASH) Now?
Washington Trust Bancorp Inc (NASDAQ:WASH), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. Less covered, small-stocks like WASH sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could WASH still be trading at a low price relative to its actual value? Today I will analyse the most recent data on WASH’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Washington Trust Bancorp
Is WASH still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 19.3x is currently trading slightly above its industry peers’ ratio of 16.5x, which means if you buy WASH today, you’d be paying a relatively reasonable price for it. And if you believe that WASH should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like WASH’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 WASH’s stock is less volatile than the wider market given its low beta.
What kind of growth will WASH 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 WASH future expectations. With profit expected to grow by 24.92% over the next couple of years, the future seems bright for WASH. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? WASH’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 WASH? 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 an eye on WASH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for WASH, which 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 Washington Trust Bancorp. You can find everything you need to know about WASH in the latest infographic research report. If you are no longer interested in Washington Trust Bancorp, 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.
