Is Now The Time To Look At Buying Clearwater Paper Corporation (NYSE:CLW)?

Clearwater Paper Corporation (NYSE:CLW), might not be a large cap stock, but it saw a decent share price growth in the teens level on the NYSE 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? Let’s examine Clearwater Paper’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Clearwater Paper

What Is Clearwater Paper Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.41% above my intrinsic value, which means if you buy Clearwater Paper today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $35.15, there’s only an insignificant downside when the price falls to its real value. What's more, Clearwater Paper’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Clearwater Paper generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Clearwater Paper, it is expected to deliver a relatively unexciting top-line growth of 7.2% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? CLW’s 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 CLW, 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Be aware that Clearwater Paper is showing 3 warning signs in our investment analysis and 1 of those can't be ignored...

If you are no longer interested in Clearwater Paper, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.