Is Nobelium Tech Corp (TSXV:NBLP) Cheap And High Growth?
Nobelium Tech Corp (TSXV:NBL.P), a CADCA$157.50K small-cap, operates in the capital markets industry, which now face the choice of either being disintermediated or proactively disrupting their own business models to thrive in the future. Financial services analysts are forecasting for the entire industry, negative growth in the upcoming year , and an enormous growth of 41.34% over the next couple of years. However this rate still came in below the growth rate of the Canadian stock market as a whole. Below, I will examine the sector growth prospects, as well as evaluate whether NBL.P is lagging or leading in the industry. View our latest analysis for Nobelium Tech
What’s the catalyst for NBL.P’s sector growth?
The threat of disintermediation in the capital markets industry is both real and imminent, taking profits away from traditional incumbent financial institutions. In the past year, the industry delivered negative growth of -1.30%, underperforming the Canadian market growth of 8.26%. NBL.P lags the pack with its sustained negative earnings over the past couple of years. The company’s outlook seems uncertain, with a lack of analyst coverage, which doesn’t boost our confidence in the stock. This lack of growth and transparency means NBL.P may be trading cheaper than its peers.
Is NBL.P and the sector relatively cheap?
The capital markets industry is trading at a PE ratio of 14x, relatively similar to the rest of the Canadian stock market PE of 17x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. Furthermore, the industry returned a similar 8.83% on equities compared to the market’s 9.62%. Since NBL.P’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge NBL.P’s value is to assume the stock should be relatively in-line with its industry.
What this means for you:
Are you a shareholder? NBL.P has been a capital markets industry laggard in the past year. If your initial investment thesis is around the growth prospects of NBL.P, there are other capital markets companies that have delivered higher growth, and perhaps trading at a discount to the industry average. Consider how NBL.P fits into your wider portfolio and the opportunity cost of holding onto the stock.
Are you a potential investor? If NBL.P has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although its growth has delivered lower growth relative to its capital markets peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. Before you make a decision on the stock, I suggest you look at NBL.P’s future cash flows in order to assess whether the stock is trading at a reasonable price.
For a deeper dive into Nobelium Tech’s stock, take a look at the company’s latest free analysis report to find out more on its financial health and other fundamentals. Interested in other financial stocks instead? Use our free playform to see my list of over 600 other financial companies trading on the market.
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.
