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Swift Networks Group Limited (ASX:SW1), a communications company based in Australia, received a lot of attention from a substantial price movement on the ASX in the over the last few months, increasing to A$0.51 at one point, and dropping to the lows of A$0.34. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Swift Networks Group’s current trading price of A$0.34 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 Swift Networks Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Swift Networks Group
Is Swift Networks Group still cheap?
Great news for investors – Swift Networks Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is A$0.88, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Swift Networks Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Swift Networks Group?
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 revenues expected to grow by 52.75% over the next year, the future seems bright for Swift Networks Group. If the level of expenses is able to be maintained, it looks like higher cash flows is on the cards for the stock in the upcoming year, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since SW1 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 financial health to consider, which could explain the current undervaluation.