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NanoXplore Inc. (TSE:GRA), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$2.69 at one point, and dropping to the lows of CA$2.16. 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 NanoXplore's current trading price of CA$2.27 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 NanoXplore’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for NanoXplore
What Is NanoXplore Worth?
The stock is currently trading at CA$2.27 on the share market, which means it is overvalued by 34% compared to our intrinsic value of CA$1.69. This means that the opportunity to buy NanoXplore at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that NanoXplore’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 NanoXplore look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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, NanoXplore's earnings are expected to increase by 53%, 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 well and truly priced in GRA’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe GRA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on GRA for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for GRA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.