In This Article:
While Polaris Renewable Energy Inc. (TSE:PIF) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. While good news for shareholders, the company has traded much higher in the past year. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Polaris Renewable Energy’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Polaris Renewable Energy
What Is Polaris Renewable Energy Worth?
Good news, investors! Polaris Renewable Energy is still a bargain right now. According to our valuation, the intrinsic value for the stock is CA$19.00, but it is currently trading at CA$12.97 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Polaris Renewable Energy’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Polaris Renewable Energy?
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. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Polaris Renewable Energy, at least in the near future.
What This Means For You
Are you a shareholder? Although PIF is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to PIF, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on PIF for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.