Gener8 Maritime Inc (NYSE:GNRT), an energy company based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $6.32 and falling to the lows of $5.48. 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 Gener8 Maritime’s current trading price of $5.88 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 Gener8 Maritime’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 Gener8 Maritime
What is Gener8 Maritime worth?
The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Gener8 Maritime’s ratio of 0.39x is trading slightly below its industry peers’ ratio of 1.43x, which means if you buy Gener8 Maritime today, you’d be paying a relatively fair price for it. And if you believe Gener8 Maritime should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like Gener8 Maritime’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Gener8 Maritime 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. 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. With profit expected to grow by 92.95% over the next year, the near-term future seems bright for Gener8 Maritime. 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? GNRT’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 track record of its management team. Have these factors changed since the last time you looked at GNRT? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on GNRT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for GNRT, 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 Gener8 Maritime. You can find everything you need to know about Gener8 Maritime in the latest infographic research report. If you are no longer interested in Gener8 Maritime, 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.