Westmoreland Coal Company (NASDAQ:WLB), an energy company based in United States, saw a decent share price growth in the teens level on the NasdaqGM over the last few months. As a small cap stock, which tends to lack high analyst coverage, 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? Today I will analyse the most recent data on Westmoreland Coal’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Westmoreland Coal

Is Westmoreland Coal still cheap?

Good news, investors! Westmoreland Coal is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $13.06, but it is currently trading at US$0.48 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Westmoreland Coal’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.

What kind of growth will Westmoreland Coal generate?

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. With profit expected to grow by 71.31% over the next couple of years, the future seems bright for Westmoreland Coal. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since WLB is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on WLB for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WLB. 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 buy.