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Is It The Right Time To Buy FS Bancorp Inc (NASDAQ:FSBW)?

Frank Brewer

FS Bancorp Inc (NASDAQ:FSBW), operating in the financial services industry based in United States, received a lot of attention from a substantial price movement on the NasdaqCM in the over the last few months, increasing to $59.38 at one point, and dropping to the lows of $53.79. 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 FS Bancorp’s current trading price of $58.99 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 FS Bancorp’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 FS Bancorp

What is FS Bancorp worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6% above my intrinsic value, which means if you buy FS Bancorp today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $55.68, there’s only an insignificant downside when the price falls to its real value. Furthermore, FS Bancorp’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Can we expect growth from FS Bancorp?

NasdaqCM:FSBW Future Profit Feb 1st 18

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. FS Bancorp’s earnings over the next few years are expected to increase by 37.49%, 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? FS Bancorp’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? 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 FS Bancorp, 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 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 FS Bancorp. You can find everything you need to know about FS Bancorp in the latest infographic research report. If you are no longer interested in FS Bancorp, 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.