At US$11.22, Is It Time To Put Northern Technologies International Corporation (NASDAQ:NTIC) On Your Watch List?
While Northern Technologies International Corporation (NASDAQ:NTIC) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$13.70 and falling to the lows of US$10.80. 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 Northern Technologies International's current trading price of US$11.22 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 Northern Technologies International’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 Northern Technologies International
What's the opportunity in Northern Technologies International?
Great news for investors – Northern Technologies International is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Northern Technologies International’s ratio of 12.34x is below its peer average of 19.36x, which indicates the stock is trading at a lower price compared to the Chemicals industry. However, given that Northern Technologies International’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.
What does the future of Northern Technologies International look like?
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. Though in the case of Northern Technologies International, it is expected to deliver a relatively unexciting earnings growth of 1.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Northern Technologies International, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since NTIC is currently trading below the industry PE ratio, 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 price multiple.
Are you a potential investor? If you’ve been keeping an eye on NTIC for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NTIC. 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 assessment.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 2 warning signs for Northern Technologies International and you'll want to know about them.
If you are no longer interested in Northern Technologies International, 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.
