Why Heritage-Crystal Clean, Inc (NASDAQ:HCCI) Could Be Worth Watching

Heritage-Crystal Clean, Inc (NASDAQ:HCCI), 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 NASDAQGS. 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 Heritage-Crystal Clean’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Heritage-Crystal Clean

Is Heritage-Crystal Clean still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.19% above my intrinsic value, which means if you buy Heritage-Crystal Clean today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $27.21, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Heritage-Crystal Clean’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 does the future of Heritage-Crystal Clean 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. 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. With profit expected to more than double over the next couple of years, the future seems bright for Heritage-Crystal Clean. 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? HCCI’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on HCCI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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 want to dive deeper into Heritage-Crystal Clean, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for Heritage-Crystal Clean you should know about.

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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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