What Is Base Resources Limited’s (ASX:BSE) Share Price Doing?
Base Resources Limited (ASX:BSE), a metals and mining company based in Australia, received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to A$0.29 at one point, and dropping to the lows of A$0.23. 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 Base Resources’s current trading price of A$0.23 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 Base Resources’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 Base Resources
Is Base Resources still cheap?
Great news for investors – Base Resources is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is A$0.95, but it is currently trading at AU$0.23 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Base Resources’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, 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 does the future of Base Resources look like?
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. With profit expected to grow by 40.49% over the next couple of years, the future seems bright for Base Resources. 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? Since BSE is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on BSE for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BSE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Base Resources. You can find everything you need to know about Base Resources in the latest infographic research report. If you are no longer interested in Base Resources, 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.
