Yahoo Finance Is There Now An Opportunity In Chartwell Retirement Residences (TSE:CSH.UN)?
Chartwell Retirement Residences (TSE:CSH.UN), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. The company is now trading at yearly-high levels following the recent surge in its share price. As a CA$3.1b market cap stock, it seems odd Chartwell Retirement Residences is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today we will analyse the most recent data on Chartwell Retirement Residences’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Chartwell Retirement Residences
What's The Opportunity In Chartwell Retirement Residences?
Chartwell Retirement Residences appears to be overvalued by 27% at the moment, based on our discounted cash flow valuation. The stock is currently priced at CA$12.91 on the market compared to our intrinsic value of CA$10.20. This means that the opportunity to buy Chartwell Retirement Residences at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Chartwell Retirement Residences’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Chartwell Retirement Residences 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. Chartwell Retirement Residences' revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in CSH.UN’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe CSH.UN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on CSH.UN for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for CSH.UN, which means it’s worth diving deeper into other factors 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. Every company has risks, and we've spotted 2 warning signs for Chartwell Retirement Residences you should know about.
If you are no longer interested in Chartwell Retirement Residences, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
