Is Now The Time To Look At Buying High Liner Foods Incorporated (TSE:HLF)?
While High Liner Foods Incorporated (TSE:HLF) might not have the largest market cap around , it saw a decent share price growth of 17% on the TSX over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at High Liner Foods’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for High Liner Foods
What Is High Liner Foods Worth?
Great news for investors – High Liner Foods is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that High Liner Foods’s ratio of 7.93x is below its peer average of 13.43x, which indicates the stock is trading at a lower price compared to the Food industry. What’s more interesting is that, High Liner Foods’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will High Liner Foods 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. 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 the company's future expectations. Though in the case of High Liner Foods, it is expected to deliver a relatively unexciting top-line growth of 3.3% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since HLF is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on HLF for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HLF. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
If you'd like to know more about High Liner Foods as a business, it's important to be aware of any risks it's facing. For example, we've found that High Liner Foods has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.
If you are no longer interested in High Liner Foods, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
