At CA$6.20, Is Black Diamond Group Limited (TSE:BDI) Worth Looking At Closely?
Black Diamond Group Limited (TSE:BDI), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$7.16 at one point, and dropping to the lows of CA$5.88. 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 Black Diamond Group's current trading price of CA$6.20 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 Black Diamond Group’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 Black Diamond Group
What Is Black Diamond Group Worth?
Great news for investors – Black Diamond Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is CA$9.37, but it is currently trading at CA$6.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Black Diamond Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Black Diamond Group generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Black Diamond Group, it is expected to deliver a relatively unexciting earnings growth of 1.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since BDI is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on BDI for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BDI. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Black Diamond Group has 2 warning signs and it would be unwise to ignore these.
If you are no longer interested in Black Diamond Group, 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.
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