Is It Time To Buy CAI International Inc (NYSE:CAI)?
CAI International Inc (NYSE:CAI), a trade distributors company based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $26.01 and falling to the lows of $20.38. 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 CAI International’s current trading price of $22.34 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 CAI International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for CAI International
What is CAI International worth?
Great news for investors – CAI International is still trading at a fairly cheap price. 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 CAI International’s ratio of 5.22x is below its peer average of 14.55x, which suggests the stock is undervalued compared to the Trade Distributors industry. However, given that CAI International’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will CAI International 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. 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. However, with a relatively muted profit growth of 3.79% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for CAI International, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since CAI is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CAI for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CAI. 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 buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on CAI International. You can find everything you need to know about CAI International in the latest infographic research report. If you are no longer interested in CAI International, 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.
