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Westshore Terminals Investment Corporation (TSE:WTE), is not the largest company out there, but it received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$24.26 at one point, and dropping to the lows of CA$21.76. 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 Westshore Terminals Investment's current trading price of CA$23.38 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 Westshore Terminals Investment’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 Westshore Terminals Investment
Is Westshore Terminals Investment Still Cheap?
According to our valuation model, the stock is currently overvalued by about 21%, trading at CA$23.38 compared to our intrinsic value of CA$19.32. This means that the opportunity to buy Westshore Terminals Investment at a good price has disappeared! Another thing to keep in mind is that Westshore Terminals Investment’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of Westshore Terminals Investment look like?
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. However, with a negative profit growth of -3.7% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Westshore Terminals Investment. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? If you believe WTE should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.