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IPD Group Limited (ASX:IPG), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the ASX. While good news for shareholders, the company has traded much higher in the past year. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at IPD Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
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What's The Opportunity In IPD Group?
Good news, investors! IPD Group is still a bargain right now. According to our valuation, the intrinsic value for the stock is A$5.42, but it is currently trading at AU$3.89 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, IPD Group’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
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What kind of growth will IPD Group 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. 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. IPD Group's earnings over the next few years are expected to increase by 25%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since IPG is currently undervalued, it may be a great time to accumulate more of 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 IPG for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IPG. 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 investment decision.