CNO Financial Group Inc (NYSE:CNO), which is in the insurance business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $22.26 at one point, and dropping to the lows of $18.39. 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 CNO Financial Group’s current trading price of $18.41 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CNO Financial Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in CNO Financial Group?
The stock is currently trading at US$18.41 on the share market, which means it is overvalued by 22.01% compared to my intrinsic value of $15.09. This means that the opportunity to buy CNO Financial Group at a good price has disappeared! But, is there another opportunity to buy low in the future? Since CNO Financial Group’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 the stock moves relative to the rest of the market.
What does the future of CNO Financial Group look like?
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 the company’s future expectations. With profit expected to grow by 56% over the next couple of years, the future seems bright for CNO Financial Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in CNO’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe CNO 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 tabs on CNO for some time, 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 CNO, 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 CNO Financial Group. You can find everything you need to know about CNO Financial Group in the latest infographic research report. If you are no longer interested in CNO Financial Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.