In This Article:
Colliers International Group Inc. (TSE:CIGI), which is in the real estate business, and is based in Canada, saw a decent share price growth in the teens level on the TSX over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Colliers International Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Colliers International Group
What's the opportunity in Colliers International Group?
According to my valuation model, Colliers International Group seems to be fairly priced at around 19.08% above my intrinsic value, which means if you buy Colliers International Group today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth CA$80.74, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Colliers International Group’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Colliers International Group 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 36% over the next couple of years, the future seems bright for Colliers International Group. 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 already priced in CIGI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on CIGI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.