Should You Think About Buying SeaLink Travel Group Limited (ASX:SLK) Now?

SeaLink Travel Group Limited (ASX:SLK), is not the largest company out there, but it saw significant share price movement during recent months on the ASX, rising to highs of AU$10.41 and falling to the lows of AU$8.92. 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 SeaLink Travel Group's current trading price of AU$9.26 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 SeaLink Travel Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for SeaLink Travel Group

Is SeaLink Travel Group still cheap?

Great news for investors – SeaLink Travel Group is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is A$11.96, but it is currently trading at AU$9.26 on the share market, meaning that there is still an opportunity to buy now. However, given that SeaLink Travel 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.

Can we expect growth from SeaLink Travel Group?

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. With profit expected to more than double over the next couple of years, the future seems bright for SeaLink Travel Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since SLK is currently undervalued, it may be a great time to increase 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SLK for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SLK. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you want to dive deeper into SeaLink Travel Group, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for SeaLink Travel Group (1 is significant!) that we believe deserve your full attention.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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