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Is There Now An Opportunity In Berkshire Hills Bancorp, Inc. (NYSE:BHLB)?

Simply Wall St

Berkshire Hills Bancorp, Inc. (NYSE:BHLB), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Berkshire Hills Bancorp’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Berkshire Hills Bancorp

Is Berkshire Hills Bancorp still cheap?

According to my valuation model, Berkshire Hills Bancorp seems to be fairly priced at around 5.7% below my intrinsic value, which means if you buy Berkshire Hills Bancorp today, you’d be paying a fair price for it. And if you believe the company’s true value is $34.86, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Berkshire Hills Bancorp’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Berkshire Hills Bancorp?

NYSE:BHLB Past and Future Earnings, January 1st 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Berkshire Hills Bancorp’s earnings over the next few years are expected to increase by 67%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? BHLB’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 the stock? 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 BHLB, 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 the company, which means it’s worth diving deeper into 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 Berkshire Hills Bancorp. You can find everything you need to know about Berkshire Hills Bancorp in the latest infographic research report. If you are no longer interested in Berkshire Hills Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.