Union Bankshares Corporation (NASDAQ:UBSH), operating in the financial services industry based in United States, received a lot of attention from a substantial price movement on the NasdaqGS in the over the last few months, increasing to $35.91 at one point, and dropping to the lows of $30.65. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether UBSH's current trading price of $30.71 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 UBSH’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Union Bankshares
What's the opportunity in UBSH?
According to my valuation model, the stock is currently overvalued by about 22%, trading at $30.71 compared to my intrinsic value of $23.93. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since UBSH’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much UBSH moves relative to the rest of the market.
Can we expect growth from UBSH?
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 UBSH future expectations. With profit expected to more than double over the next couple of years, the future seems bright for UBSH. 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? UBSH’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe UBSH should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on UBSH for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for UBSH, which means it’s worth diving deeper into other factors 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 Union Bankshares. You can find everything you need to know about UBSH in the latest infographic research report. If you are no longer interested in Union Bankshares, 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.