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Trifast plc (LON:TRI), is not the largest company out there, but it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£0.81 at one point, and dropping to the lows of UK£0.70. 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 Trifast's current trading price of UK£0.73 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 Trifast’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Trifast
What Is Trifast Worth?
The stock is currently trading at UK£0.73 on the share market, which means it is overvalued by 26% compared to our intrinsic value of £0.58. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Trifast’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Trifast 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. Though in the case of Trifast, it is expected to deliver a relatively unexciting top-line growth of 1.1% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in TRI’s future outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe TRI 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. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on TRI for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.