Is It The Right Time To Buy Cequence Energy Ltd (TSE:CQE)?
Cequence Energy Ltd (TSX:CQE), an energy company based in Canada, saw significant share price volatility over the past couple of months on the TSX, rising to the highs of CA$0.11 and falling to the lows of CA$0.04. 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 Cequence Energy’s current trading price of CA$0.04 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 Cequence Energy’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 Cequence Energy
What’s the opportunity in Cequence Energy?
Good news, investors! Cequence Energy is still a bargain right now. According to my valuation, the intrinsic value for the stock is CA$0.17, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Cequence Energy’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.
Can we expect growth from Cequence Energy?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With revenues expected to grow by a double-digit 16.44% over the next couple of years, the outlook is positive for Cequence Energy. If the level of expenses is able to be maintained, 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 CQE 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 CQE 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 CQE. 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 Cequence Energy. You can find everything you need to know about Cequence Energy in the latest infographic research report. If you are no longer interested in Cequence Energy, 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.
