MFA Financial Inc (NYSE:MFA), a mortgage reits company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $8.21 at one point, and dropping to the lows of $6.83. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether MFA Financial’s current trading price of $7.12 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MFA Financial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for MFA Financial
Is MFA Financial still cheap?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.79% below my intrinsic value, which means if you buy MFA Financial today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $8.26, then there’s not much of an upside to gain from mispricing. In addition to this, it seems like MFA Financial’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What does the future of MFA Financial look like?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. However, with a relatively muted profit growth of 4.69% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for MFA Financial, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in MFA’s future outlook, 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 MFA, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into 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 MFA Financial. You can find everything you need to know about MFA Financial in the latest infographic research report. If you are no longer interested in MFA Financial, you can use our free platform to see my list of over 50 other stocks with a high growth potential.