Yahoo Finance Is It Time To Consider Buying Cleanaway Waste Management Limited (ASX:CWY)?
Cleanaway Waste Management Limited (ASX:CWY), 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$2.91 at one point, and dropping to the lows of AU$2.57. 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 Cleanaway Waste Management's current trading price of AU$2.68 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Cleanaway Waste Management’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 Cleanaway Waste Management
What Is Cleanaway Waste Management Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.65% above my intrinsic value, which means if you buy Cleanaway Waste Management today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is A$2.44, there’s only an insignificant downside when the price falls to its real value. Furthermore, Cleanaway Waste Management’s low beta implies that the stock is less volatile than the wider market.
What does the future of Cleanaway Waste 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 more than double over the next couple of years, the future seems bright for Cleanaway Waste 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? CWY’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 CWY, 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.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Cleanaway Waste Management has 2 warning signs and it would be unwise to ignore these.
If you are no longer interested in Cleanaway Waste 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.
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