ConnectOne Bancorp, Inc. (NASDAQ:CNOB), operating in the financial services industry based in United States, received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. 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 ConnectOne Bancorp’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What's the opportunity in ConnectOne Bancorp?
According to my valuation model, ConnectOne Bancorp seems to be fairly priced at around 0.06% below my intrinsic value, which means if you buy ConnectOne Bancorp today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $25.01, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, ConnectOne Bancorp’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from ConnectOne Bancorp?
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 39% over the next couple of years, the future seems bright for ConnectOne Bancorp. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in CNOB’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on CNOB, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 ConnectOne Bancorp. You can find everything you need to know about ConnectOne Bancorp in the latest infographic research report. If you are no longer interested in ConnectOne Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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