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Bassett Furniture Industries, Incorporated (NASDAQ:BSET), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The company is now trading at yearly-high levels following the recent surge in its share price. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Bassett Furniture Industries’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Bassett Furniture Industries
What's The Opportunity In Bassett Furniture Industries?
Good news, investors! Bassett Furniture Industries is still a bargain right now. According to our valuation, the intrinsic value for the stock is $21.20, but it is currently trading at US$15.45 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Bassett Furniture Industries’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Bassett Furniture Industries 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. Though in the case of Bassett Furniture Industries, it is expected to deliver a relatively unexciting top-line growth of 5.9% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since BSET is currently undervalued, it may be a great time to increase your holdings in the stock. 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 BSET 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 BSET. 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.