Yahoo Finance Is It Time To Consider Buying Recipe Unlimited Corporation (TSE:RECP)?
While Recipe Unlimited Corporation (TSE:RECP) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the TSX. 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 take a look at Recipe Unlimited’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Recipe Unlimited
Is Recipe Unlimited Still Cheap?
According to my valuation model, Recipe Unlimited seems to be fairly priced at around 2.43% above my intrinsic value, which means if you buy Recipe Unlimited today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CA$20.13, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Recipe Unlimited’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.
Can we expect growth from Recipe Unlimited?
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 revenues expected to grow by a double-digit 12% over the next couple of years, the outlook is positive for Recipe Unlimited. If the level of expenses is able to be maintained, 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? RECP’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 track record of its management team. 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 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Recipe Unlimited, you'd also look into what risks it is currently facing. Our analysis shows 5 warning signs for Recipe Unlimited (1 is concerning!) and we strongly recommend you look at them before investing.
If you are no longer interested in Recipe Unlimited, 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.
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