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Intercede Group plc (LON:IGP), might not be a large cap stock, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£1.09 and falling to the lows of UK£0.91. 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 Intercede Group's current trading price of UK£0.99 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 Intercede Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's the opportunity in Intercede Group?
According to my valuation model, Intercede Group seems to be fairly priced at around 9.42% above my intrinsic value, which means if you buy Intercede Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is £0.91, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Intercede Group’s low beta implies that the stock is less volatile than the wider market.
What does the future of Intercede Group look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 grow by 54% over the next couple of years, the future seems bright for Intercede 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? It seems like the market has already priced in IGP’s positive outlook, 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 IGP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Case in point: We've spotted 4 warning signs for Intercede Group you should be mindful of and 2 of these can't be ignored.
If you are no longer interested in Intercede Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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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