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First Busey Corporation (NASDAQ:BUSE), operating in the financial services industry based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $32.56 and falling to the lows of $29.2. 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 First Busey’s current trading price of $29.73 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 First Busey’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 First Busey
What’s the opportunity in First Busey?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17% above my intrinsic value, which means if you buy First Busey today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $25.47, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since First Busey’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.
Can we expect growth from First Busey?
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. First Busey’s earnings over the next few years are expected to increase by 85.64%, 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? It seems like the market has already priced in BUSE’s positive outlook, 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?