Is It Too Late To Consider Buying Finning International Inc. (TSE:FTT)?

Finning International Inc. (TSE:FTT), might not be a large cap stock, but it saw a significant share price rise of 67% in the past couple of months on the TSX. The recent jump in the share price has meant that the company is trading at close to its 52-week high. 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. However, could the stock still be trading at a relatively cheap price? Let’s examine Finning International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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What Is Finning International Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 2.40% above our intrinsic value, which means if you buy Finning International today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CA$58.99, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Finning International’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

See our latest analysis for Finning International

What does the future of Finning International look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 8.3% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Finning International, at least in the short term.

What This Means For You

Are you a shareholder? FTT’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 an eye on FTT, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Finning International as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 2 warning signs for Finning International and we think they deserve your attention.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.