Is There Now An Opportunity In Chartwell Retirement Residences (TSE:CSH.UN)?

Chartwell Retirement Residences (TSE:CSH.UN), might not be a large cap stock, but it saw its share price hover around a small range of CA$11.98 to CA$12.91 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 Chartwell Retirement Residences’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Chartwell Retirement Residences

What Is Chartwell Retirement Residences Worth?

According to our valuation model, Chartwell Retirement Residences seems to be fairly priced at around 19.46% above our intrinsic value, which means if you buy Chartwell Retirement Residences today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is CA$10.35, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Chartwell Retirement Residences’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Chartwell Retirement Residences generate?

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. Chartwell Retirement Residences' revenue growth are expected to be in the teens in the upcoming year, 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? It seems like the market has already priced in CSH.UN’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 confidence to invest in the company should the price drop below its fair value?

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

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 2 warning signs for Chartwell Retirement Residences (of which 1 shouldn't be ignored!) you should know about.

If you are no longer interested in Chartwell Retirement Residences, 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.