Cequence Energy Ltd (TSX:CQE), an energy company based in Canada, saw a double-digit share price rise of over 10% in the past couple of months on the TSX. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Cequence Energy’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for Cequence Energy
Is Cequence Energy still cheap?Great news for investors – Cequence Energy is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is CA$0.17, but it is currently trading at CA$0.045 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Cequence Energy’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.
What kind of growth will Cequence Energy generate?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. 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. Cequence Energy’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since CQE is currently undervalued, it may be a great time to accumulate more of 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CQE for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CQE. 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 investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cequence Energy. You can find everything you need to know about Cequence Energy in the latest infographic research report. If you are no longer interested in Cequence Energy, you can use our free platform to see my list of over 50 other stocks with a high growth potential.