Federated Investors Inc (NYSE:FII), a capital markets company based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $36.51 at one point, and dropping to the lows of $31.15. 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 Federated Investors’s current trading price of $31.15 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Federated Investors’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 Federated Investors

What’s the opportunity in Federated Investors?

Great news for investors – Federated Investors is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $48.64, but it is currently trading at US$31.15 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Federated Investors’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 does the future of Federated Investors look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Federated Investors, it is expected to deliver a negative earnings growth of -9.81%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although FII is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to FII, 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 FII for a while, but hesitant on making the leap, I 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Federated Investors. You can find everything you need to know about Federated Investors in the latest infographic research report. If you are no longer interested in Federated Investors, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.