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Cedar Woods Properties Limited (ASX:CWP), might not be a large cap stock, but it saw a significant share price rise of 23% in the past couple of months on the ASX. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Cedar Woods Properties’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Cedar Woods Properties
What Is Cedar Woods Properties Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 19.88% above our intrinsic value, which means if you buy Cedar Woods Properties today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is A$4.68, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Cedar Woods Properties’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Cedar Woods Properties 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. Cedar Woods Properties' earnings over the next few years are expected to increase by 46%, 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? It seems like the market has already priced in CWP’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on CWP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.