Teekay Tankers Ltd (NYSE:TNK), an energy company based in Bermuda, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $1.26 at one point, and dropping to the lows of $1.08. 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 Teekay Tankers’s current trading price of $1.17 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 Teekay Tankers’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 Teekay Tankers
What is Teekay Tankers worth?
Good news, investors! Teekay Tankers is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $5.3, but it is currently trading at US$1.17 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Teekay Tankers’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Teekay Tankers 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. In the upcoming year, Teekay Tankers’s earnings are expected to increase by 52.46%, 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? Since TNK 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 TNK for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TNK. 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 investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Teekay Tankers. You can find everything you need to know about Teekay Tankers in the latest infographic research report. If you are no longer interested in Teekay Tankers, 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.