Wajax Corporation (TSX:WJX), a capital goods company based in Canada, received a lot of attention from a substantial price movement on the TSX in the over the last few months, increasing to $24.75 at one point, and dropping to the lows of $18.74. 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 WJX’s current trading price of $18.99 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 WJX’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 Wajax
What’s the opportunity in WJX?Great news for investors – WJX is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $29.47 which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, WJX’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much WJX moves relative to the rest of the market.
Can we expect growth from WJX?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 WJX future expectations. However, with a relatively muted revenue growth of 3.30% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for WJX.
What this means for you:
Are you a shareholder? Since WJX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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.
Are you a potential investor? If you’ve been keeping an eye on WJX for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WJX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Wajax. You can find everything you need to know about WJX in the latest infographic research report. If you are no longer interested in Wajax, you can use our free platform to see my list of over 50 other stocks with a high growth potential.