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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.