Is Now An Opportune Moment To Examine Renaissance Global Limited (NSE:RGL)?

Renaissance Global Limited (NSE:RGL), might not be a large cap stock, but it saw a decent share price growth in the teens level on the NSEI over the last few months. 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? Today I will analyse the most recent data on Renaissance Global’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Renaissance Global

Is Renaissance Global still cheap?

Great news for investors – Renaissance Global is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is ₹954.46, but it is currently trading at ₹656 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Renaissance Global’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 Renaissance Global 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. However, with an extreme expected decline in the top-line over the next couple of years, near-term growth is certainly not a driver of a buy decision. Even with a larger decline in expenses, it seems like high uncertainty is on the cards for Renaissance Global.

What this means for you:

Are you a shareholder? Although RGL is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to RGL, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on RGL for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Renaissance Global (of which 1 can't be ignored!) you should know about.

If you are no longer interested in Renaissance Global, 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.