Is There Now An Opportunity In Heartland Group Holdings Limited (NZSE:HGH)?

Heartland Group Holdings Limited (NZSE:HGH), operating in the financial services industry based in New Zealand, saw a double-digit share price rise of over 10% in the past couple of months on the NZSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Heartland Group Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Heartland Group Holdings

What's the opportunity in Heartland Group Holdings?

According to my valuation model, Heartland Group Holdings seems to be fairly priced at around 0.43% above my intrinsic value, which means if you buy Heartland Group Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is NZ$1.84, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Heartland Group Holdings’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Heartland Group Holdings generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 48% over the next couple of years, the future seems bright for Heartland Group Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? HGH’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 HGH, now may not be the most advantageous 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Heartland Group Holdings. You can find everything you need to know about Heartland Group Holdings in the latest infographic research report. If you are no longer interested in Heartland Group Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.