https://simplywall.st/news/2017/11/19/should-you-buy-exchange-income-corporation-tsxeif-at-35-64/
Exchange Income Corporation (TSX:EIF), a airlines company based in Canada, saw a double-digit share price rise of over 10% in the past couple of months on the TSX. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at EIF’s outlook and value based on the most recent financial data to see if the opportunity still exists.Check out our latest analysis for Exchange Income
What is EIF worth?
Good news, investors! EIF is still a bargain right now. According to my valuation,
the intrinsic value for the stock is CA$60.78, but it is currently trading at CA$35.64 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, EIF’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because EIF’s stock is less volatile than the wider market given its low beta.
What kind of growth will EIF generate?
TSX:EIF Future Profit Nov 19th 17 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. EIF’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since EIF is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on EIF for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EIF. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.