Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC), a consumer retailing company based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. 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. But what if there is still an opportunity to buy? Let’s take a look at Natural Grocers by Vitamin Cottage’s outlook and value based on the most recent financial data to see if the opportunity still exists. View out our latest analysis for Natural Grocers by Vitamin Cottage
Is Natural Grocers by Vitamin Cottage still cheap?Great news for investors – Natural Grocers by Vitamin Cottage is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $14.88, but it is currently trading at US$11.45 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 Natural Grocers by Vitamin Cottage’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 Natural Grocers by Vitamin Cottage 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. Though in the case of Natural Grocers by Vitamin Cottage, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although NGVC is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to NGVC, 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 an eye on NGVC for a while, but hesitant on making the leap, I recommend you dig deeper 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Natural Grocers by Vitamin Cottage. You can find everything you need to know about Natural Grocers by Vitamin Cottage in the latest infographic research report. If you are no longer interested in Natural Grocers by Vitamin Cottage, you can use our free platform to see my list of over 50 other stocks with a high growth potential.