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Neo Performance Materials Inc. (TSE:NEO), might not be a large cap stock, but it saw a decent share price growth of 17% on the TSX over the last few months. The recent share price gains has brought the company back closer to its yearly peak. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Neo Performance Materials’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Neo Performance Materials
What's The Opportunity In Neo Performance Materials?
Good news, investors! Neo Performance Materials is still a bargain right now. According to our valuation, the intrinsic value for the stock is CA$12.41, but it is currently trading at CA$7.96 on the share market, meaning that there is still an opportunity to buy now. However, given that Neo Performance Materials’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 kind of growth will Neo Performance Materials generate?
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. Neo Performance Materials' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since NEO is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on NEO for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NEO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.