Is It The Right Time To Buy Advanced Emissions Solutions Inc (NASDAQ:ADES)?
Advanced Emissions Solutions Inc (NASDAQ:ADES), a chemicals company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGM, rising to the highs of $11.84 and falling to the lows of $10.46. 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 Advanced Emissions Solutions’s current trading price of $11.3 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 Advanced Emissions Solutions’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 Advanced Emissions Solutions
What’s the opportunity in Advanced Emissions Solutions?
Good news, investors! Advanced Emissions Solutions is still a bargain right now. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Advanced Emissions Solutions’s ratio of 8.86x is below its peer average of 16.7x, which suggests the stock is undervalued compared to the Chemicals industry. Although, there may be another chance to buy again in the future. This is because Advanced Emissions Solutions’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Advanced Emissions Solutions?
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 more than double over the next couple of years, the future seems bright for Advanced Emissions Solutions. 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 ADES is currently undervalued, it may be a great time to accumulate more of 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 ADES for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ADES. 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 Advanced Emissions Solutions. You can find everything you need to know about Advanced Emissions Solutions in the latest infographic research report. If you are no longer interested in Advanced Emissions Solutions, 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.
