When Should You Buy Inuvo, Inc. (NYSEMKT:INUV)?

Inuvo, Inc. (NYSEMKT:INUV), is not the largest company out there, but it received a lot of attention from a substantial price increase on the AMEX over the last few months. Less-covered, small caps tend to present 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? Today I will analyse the most recent data on Inuvo’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Inuvo

Is Inuvo still cheap?

According to my valuation model, Inuvo seems to be fairly priced at around 14.82% above my intrinsic value, which means if you buy Inuvo today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $1.06, there’s only an insignificant downside when the price falls to its real value. Furthermore, Inuvo’s low beta implies that the stock is less volatile than the wider market.

What does the future of Inuvo look like?

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. With profit expected to grow by 62% over the next year, the near-term future seems bright for Inuvo. 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? INUV’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 INUV, now may not be the most optimal 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 3 warning signs for Inuvo (of which 1 can't be ignored!) you should know about.

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

When trading Inuvo or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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