The First of Long Island Corporation (NASDAQ:FLIC), operating in the financial services industry based in United States, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of $26.3 to $28.75. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at FLIC’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 FLIC
What is FLIC worth?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 19.6x is currently trading slightly below its industry peers’ ratio of 19.6x, which means if you buy FLIC today, you’d be paying a fair price for it. And if you believe FLIC should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like FLIC’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because FLIC’s stock is less volatile than the wider market given its low beta.
What kind of growth will FLIC 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. FLIC’s earnings over the next few years are expected to increase by 26.43%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? FLIC’s optimistic future growth appears to have been factored into the current share price, 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 FLIC? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on FLIC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for FLIC, which means it’s worth further examining 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 First of Long Island. You can find everything you need to know about FLIC in the latest infographic research report. If you are no longer interested in First of Long Island, 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.