Have Investors Already Priced In Wajax Corporation’s (TSX:WJX) Growth?
Wajax Corporation (TSX:WJX), a trading companies and distributors company based in Canada, led the TSX gainers with a relatively large price hike in the past couple of weeks. Less covered, small-stocks like WJX 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 WJX still be trading at a low price relative to its actual value? Let’s examine WJX’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. View our latest analysis for Wajax
What is WJX worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% above my intrinsic value, which means if you buy WJX today, you’d be paying a relatively fair price for it. And if you believe that WJX is really worth CA$19.9, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since WJX’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much WJX moves relative to the rest of the market.
Can we expect growth from WJX?
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 WJX future expectations. Though in the case of WJX, it is expected to deliver a relatively unexciting top-line growth of 2.61% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for WJX, at least in the near term.
What this means for you:
Are you a shareholder? WJX’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 financial strength of the company. Have these factors changed since the last time you looked at WJX? 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 WJX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for WJX, which means it’s worth further examining 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 Wajax. You can find everything you need to know about WJX in the latest infographic research report. If you are no longer interested in Wajax, 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.
