At CA$13.27, Is It Time To Put Cervus Equipment Corporation (TSE:CERV) On Your Watch List?
Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
Cervus Equipment Corporation (TSE:CERV), which is in the trade distributors business, and is based in Canada, received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$14.59 at one point, and dropping to the lows of CA$12.35. 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 Cervus Equipment's current trading price of CA$13.27 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 Cervus Equipment’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Cervus Equipment
What's the opportunity in Cervus Equipment?
Good news, investors! Cervus Equipment is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$21.33, but it is currently trading at CA$13.27 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Cervus Equipment’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Cervus Equipment generate?
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 profit growth of 7.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Cervus Equipment, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since CERV 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 CERV 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 CERV. 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 investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cervus Equipment. You can find everything you need to know about Cervus Equipment in the latest infographic research report. If you are no longer interested in Cervus Equipment, 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.
