Yahoo Finance Is It Too Late To Consider Buying Tabcorp Holdings Limited (ASX:TAH)?
Tabcorp Holdings Limited (ASX:TAH), 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$5.39 at one point, and dropping to the lows of AU$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 Tabcorp Holdings' current trading price of AU$0.92 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 Tabcorp Holdings’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 Tabcorp Holdings
What's The Opportunity In Tabcorp Holdings?
According to my valuation model, Tabcorp Holdings seems to be fairly priced at around 2.59% above my intrinsic value, which means if you buy Tabcorp Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth A$0.90, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Tabcorp Holdings’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from Tabcorp Holdings?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Tabcorp Holdings, at least in the near future.
What This Means For You
Are you a shareholder? Currently, TAH 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 de-risk 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.
Are you a potential investor? If you’ve been keeping tabs on TAH for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on TAH should the price fluctuate below its true value.
If you want to dive deeper into Tabcorp Holdings, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Tabcorp Holdings you should know about.
If you are no longer interested in Tabcorp Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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