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At CA$18.30, Is It Time To Put Pollard Banknote Limited (TSE:PBL) On Your Watch List?
Pollard Banknote Limited (TSE:PBL), is not the largest company out there, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$29.67 and falling to the lows of CA$18.30. 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 Pollard Banknote's current trading price of CA$18.30 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 Pollard Banknote’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Pollard Banknote Still Cheap?
According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Pollard Banknote’s ratio of 14.07x is trading slightly below its industry peers’ ratio of 15.01x, which means if you buy Pollard Banknote today, you’d be paying a reasonable price for it. And if you believe that Pollard Banknote should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Furthermore, Pollard Banknote’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
See our latest analysis for Pollard Banknote
What does the future of Pollard Banknote look like?
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. With profit expected to grow by 53% over the next couple of years, the future seems bright for Pollard Banknote. 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? It seems like the market has already priced in PBL’s positive outlook, with shares trading around industry price multiples. 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 PBL? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on PBL, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for PBL, which 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.
Diving deeper into the forecasts for Pollard Banknote mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts .
If you are no longer interested in Pollard Banknote, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About TSX:PBL
Pollard Banknote
Engages in the manufacture and sale of lottery and charitable gaming products and solutions in the United States, Canada, and internationally.
Undervalued with solid track record and pays a dividend.
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