Yahoo Finance Is It Too Late To Consider Buying Element Fleet Management Corp. (TSE:EFN)?
Element Fleet Management Corp. (TSE:EFN), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. The recent jump in the share price has meant that the company is trading around its 52-week high. As a mid-cap 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 we will analyse the most recent data on Element Fleet Management’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Element Fleet Management
Is Element Fleet Management Still Cheap?
According to our valuation model, Element Fleet Management seems to be fairly priced at around 18% below our intrinsic value, which means if you buy Element Fleet Management today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CA$30.30, then there’s not much of an upside to gain from mispricing. In addition to this, Element Fleet Management has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Element Fleet Management 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. With profit expected to grow by a double-digit 16% in the upcoming year, the short-term outlook is positive for Element Fleet Management. 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? EFN’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 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 EFN, now may not be the most optimal 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.
If you want to dive deeper into Element Fleet Management, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for Element Fleet Management (1 makes us a bit uncomfortable!) that we believe deserve your full attention.
If you are no longer interested in Element Fleet Management, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
