RediShred Capital Corp. (CVE:KUT), is not the largest company out there, but it saw significant share price movement during recent months on the TSXV, rising to highs of CA$0.85 and falling to the lows of CA$0.66. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether RediShred Capital's current trading price of CA$0.70 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at RediShred Capital’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for RediShred Capital
What's The Opportunity In RediShred Capital?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11.52% above my intrinsic value, which means if you buy RediShred Capital today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CA$0.63, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since RediShred Capital’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 RediShred Capital 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. In RediShred Capital's case, its earnings over the next year are expected to double, indicating an incredibly 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? KUT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?