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Should You Investigate Recipe Unlimited Corporation (TSE:RECP) At CA$26.99?

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Recipe Unlimited Corporation (TSE:RECP), which is in the hospitality business, and is based in Canada, saw a double-digit share price rise of over 10% in the past couple of months on the TSX. 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? Today I will analyse the most recent data on Recipe Unlimited’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Recipe Unlimited

What’s the opportunity in Recipe Unlimited?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% below my intrinsic value, which means if you buy Recipe Unlimited today, you’d be paying a fair price for it. And if you believe that the stock is really worth CA$32.19, then there’s not much of an upside to gain from mispricing. What’s more, Recipe Unlimited’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Recipe Unlimited?

TSX:RECP Past and Future Earnings, February 21st 2019
TSX:RECP Past and Future Earnings, February 21st 2019

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. Recipe Unlimited’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in RECP’s positive 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 confidence to invest in the company should the price drop below its fair value?

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Are you a potential investor? If you’ve been keeping tabs on RECP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Recipe Unlimited. You can find everything you need to know about Recipe Unlimited in the latest infographic research report. If you are no longer interested in Recipe Unlimited, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.