While The City Pub Group plc (LON:CPC) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the AIM, rising to highs of UK£1.11 and falling to the lows of UK£0.62. 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 City Pub Group's current trading price of UK£0.67 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 City Pub Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for City Pub Group
What's the opportunity in City Pub Group?
Great news for investors – City Pub Group is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is £1.02, but it is currently trading at UK£0.67 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because City Pub 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 City Pub Group look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for City Pub Group. 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? Since CPC is currently undervalued, it may be a great time to increase 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CPC for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CPC. 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.