When Should You Buy CI Financial Corp (TSE:CIX)?

CI Financial Corp (TSX:CIX), a capital markets company based in Canada, saw its share price hover around a small range of CA$28.06 to CA$29.96 over the last few weeks. But is this actually reflective of the share value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CI Financial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for CI Financial

Is CI Financial still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12% above my intrinsic value, which means if you buy CI Financial today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CA$26.75, there’s only an insignificant downside when the price falls to its real value. Furthermore, CI Financial’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.

Can we expect growth from CI Financial?

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. With profit expected to grow by 42.39% over the next couple of years, the future seems bright for CI Financial. It looks like higher cash flows 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 CI Financial’s positive outlook, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on CI Financial, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on CI Financial. You can find everything you need to know about CI Financial in the latest infographic research report. If you are no longer interested in CI Financial, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.