Have Investors Priced In Kindred Healthcare Inc’s (NYSE:KND) Growth?
Kindred Healthcare Inc (NYSE:KND), a healthcare company based in United States, saw its share price hover around a small range of $8.85 to $9.45 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Kindred Healthcare’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 Kindred Healthcare
What’s the opportunity in Kindred Healthcare?
The stock is currently trading at US$9.00 on the share market, which means it is overvalued by 43% compared to my intrinsic value of $6.28. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Kindred Healthcare’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Kindred Healthcare?
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. However, with a relatively muted revenue growth of 2.70% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Kindred Healthcare.
What this means for you:
Are you a shareholder? KND’s 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 KND 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 KND 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 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 Kindred Healthcare. You can find everything you need to know about Kindred Healthcare in the latest infographic research report. If you are no longer interested in Kindred Healthcare, 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.
