Yahoo Finance Is It Too Late To Consider Buying Sienna Senior Living Inc. (TSE:SIA)?
Sienna Senior Living Inc. (TSE:SIA), might not be a large cap stock, but it saw a decent share price growth of 14% on the TSX over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. 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 examine Sienna Senior Living’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Sienna Senior Living
What Is Sienna Senior Living Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 4.8% below our intrinsic value, which means if you buy Sienna Senior Living today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$13.73, 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 Sienna Senior Living’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 Sienna Senior Living 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 Sienna Senior Living, it is expected to deliver a relatively unexciting top-line growth of 9.2% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? SIA’s 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 financial strength of the company. 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 an eye on SIA, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 Sienna Senior Living, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for Sienna Senior Living (2 are significant!) that we believe deserve your full attention.
If you are no longer interested in Sienna Senior Living, 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.
