Stock Analysis

Is There Now An Opportunity In Retail Food Group Limited (ASX:RFG)?

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ASX:RFG
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Retail Food Group Limited (ASX:RFG), is not the largest company out there, but it led the ASX gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Retail Food Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Retail Food Group

What's The Opportunity In Retail Food Group?

Great news for investors – Retail Food Group is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is A$0.09, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Retail Food Group’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 does the future of Retail Food Group look like?

earnings-and-revenue-growth
ASX:RFG Earnings and Revenue Growth September 2nd 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Retail Food Group's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since RFG is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on RFG for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RFG. 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 investment decision.

If you'd like to know more about Retail Food Group as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 3 warning signs for Retail Food Group and you'll want to know about them.

If you are no longer interested in Retail Food Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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About ASX:RFG

Retail Food Group

Retail Food Group Limited, a food and beverage company, engages in the management of a multi-brand retail food and beverage franchise in Australia and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth3
Past Performance1
Financial Health4
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Adequate balance sheet with moderate growth potential.