Is It Too Late To Consider Buying High Liner Foods Incorporated (TSE:HLF)?
High Liner Foods Incorporated (TSE:HLF), might not be a large cap stock, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$13.75 and falling to the lows of CA$11.09. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether High Liner Foods' current trading price of CA$12.15 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 High Liner Foods’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 High Liner Foods
What's the opportunity in High Liner Foods?
Good news, investors! High Liner Foods is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$18.27, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, High Liner Foods’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from High Liner Foods?
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. Though in the case of High Liner Foods, it is expected to deliver a relatively unexciting earnings growth of 6.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for High Liner Foods, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since HLF is currently undervalued, it may be a great time to increase 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 HLF for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HLF. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've found that High Liner Foods has 2 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.
If you are no longer interested in High Liner Foods, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
