Why Superior Plus Corp. (TSE:SPB) Could Be Worth Watching

Superior Plus Corp. (TSE:SPB), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the TSX. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Superior Plus’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Superior Plus

What's the opportunity in Superior Plus?

Great news for investors – Superior Plus is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is CA$19.38, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Superior Plus’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 Superior Plus 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. However, with a relatively muted revenue growth of 4.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Superior Plus, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since SPB is currently undervalued, it may be a great time to increase your holdings in the stock. 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 SPB for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SPB. 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 buy.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Superior Plus has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Superior Plus, 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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