Why Canfor Pulp Products Inc. (TSE:CFX) Could Be Worth Watching

Canfor Pulp Products Inc. (TSE:CFX), might not be a large cap stock, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$10.44 and falling to the lows of CA$8.49. 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 Canfor Pulp Products' current trading price of CA$9.00 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 Canfor Pulp Products’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 Canfor Pulp Products

What is Canfor Pulp Products worth?

Great news for investors – Canfor Pulp Products is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is CA$14.48, but it is currently trading at CA$9.00 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Canfor Pulp Products’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 does the future of Canfor Pulp Products 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. 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. In Canfor Pulp Products' case, its revenues over the next few years are expected to grow by 31%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since CFX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on CFX for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CFX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Canfor Pulp Products has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Canfor Pulp Products, 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. 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.
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