Should You Think About Buying Chartwell Retirement Residences (TSE:CSH.UN) Now?

While Chartwell Retirement Residences (TSE:CSH.UN) might not have the largest market cap around , it maintained its current share price over the past couple of month on the TSX, with a relatively tight range of CA$14.80 to CA$16.26. However, does this price actually reflect the true 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.

See our latest analysis for Chartwell Retirement Residences

Is Chartwell Retirement Residences Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.18% 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 that the stock is really worth CA$13.94, there’s only an insignificant downside when the price falls to its real value. 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.

Can we expect growth from Chartwell Retirement Residences?

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' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 an eye on CSH.UN, now may not be the most optimal 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.

If you'd like to know more about Chartwell Retirement Residences as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 4 warning signs (2 make us uncomfortable!) that you ought to be aware of before buying any shares in Chartwell Retirement Residences.

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.