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

Finning International Inc. (TSE:FTT), which is in the trade distributors business, and is based in Canada, led the TSX gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Finning International’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Finning International

Is Finning International still cheap?

Good news, investors! Finning International is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$29.57, but it is currently trading at CA$15.33 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Finning International’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 the stock moves relative to the rest of the market.

Can we expect growth from Finning International?

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. However, with a negative profit growth of -1.0% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Finning International. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although FTT is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to FTT, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on FTT for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Finning International. You can find everything you need to know about Finning International in the latest infographic research report. If you are no longer interested in Finning International, 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 editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.