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Today we're going to take a look at the well-established Old Dominion Freight Line, Inc. (NASDAQ:ODFL). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Old Dominion Freight Line’s outlook and valuation to see if the opportunity still exists.
What's The Opportunity In Old Dominion Freight Line?
The stock is currently trading at US$164 on the share market, which means it is overvalued by 29% compared to our intrinsic value of $127.74. This means that the opportunity to buy Old Dominion Freight Line at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Old Dominion Freight Line’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.
Check out our latest analysis for Old Dominion Freight Line
What kind of growth will Old Dominion Freight Line generate?
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. With profit expected to grow by 28% over the next couple of years, the future seems bright for Old Dominion Freight Line. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in ODFL’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe ODFL 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.