ComfortDelGro Corporation Limited (SGX:C52), which is in the transportation business, and is based in Singapore, saw a decent share price growth in the teens level on the SGX over the last few months. As a mid-cap 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? Today I will analyse the most recent data on ComfortDelGro’s outlook and valuation to see if the opportunity still exists.
Is ComfortDelGro still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.47% above my intrinsic value, which means if you buy ComfortDelGro today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is SGD1.58, there’s only an insignificant downside when the price falls to its real value. In addition to this, ComfortDelGro has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will ComfortDelGro 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 ComfortDelGro, it is expected to deliver a relatively unexciting earnings growth of 6.4%, 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? C52’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on C52, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on ComfortDelGro. You can find everything you need to know about ComfortDelGro in the latest infographic research report. If you are no longer interested in ComfortDelGro, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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