Yahoo Finance What Does Elanor Investors Group's (ASX:ENN) Share Price Indicate?
Elanor Investors Group (ASX:ENN), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to AU$1.48 at one point, and dropping to the lows of AU$1.16. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Elanor Investors Group's current trading price of AU$1.17 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Elanor Investors Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Elanor Investors Group
What's The Opportunity In Elanor Investors Group?
According to our valuation model, Elanor Investors Group seems to be fairly priced at around 11% below our intrinsic value, which means if you buy Elanor Investors Group today, you’d be paying a fair price for it. And if you believe the company’s true value is A$1.32, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Elanor Investors Group’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.
What does the future of Elanor Investors Group 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. Though in the case of Elanor Investors Group, it is expected to deliver a highly negative revenue growth over the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Currently, ENN appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on ENN for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on ENN should the price fluctuate below its true value.
If you'd like to know more about Elanor Investors Group as a business, it's important to be aware of any risks it's facing. For instance, we've identified 3 warning signs for Elanor Investors Group (2 are concerning) you should be familiar with.
If you are no longer interested in Elanor Investors Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
