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While Exchange Income Corporation (TSE:EIF) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. With many analysts covering the 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 take a look at Exchange Income’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Exchange Income
What Is Exchange Income Worth?
Great news for investors – Exchange Income is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is CA$87.26, but it is currently trading at CA$56.92 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Exchange Income’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 Exchange Income 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. With profit expected to grow by 69% over the next couple of years, the future seems bright for Exchange Income. 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? Since EIF 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 EIF for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EIF. 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.