At AU$4.74, Is Cedar Woods Properties Limited (ASX:CWP) Worth Looking At Closely?

While Cedar Woods Properties Limited (ASX:CWP) might not have the largest market cap around , it saw significant share price movement during recent months on the ASX, rising to highs of AU$4.99 and falling to the lows of AU$4.53. 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 Cedar Woods Properties' current trading price of AU$4.74 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 Cedar Woods Properties’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Cedar Woods Properties

What's The Opportunity In Cedar Woods Properties?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 13.49% above our intrinsic value, which means if you buy Cedar Woods Properties today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is A$4.18, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Cedar Woods Properties’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Cedar Woods Properties 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 65% over the next couple of years, the future seems bright for Cedar Woods Properties. 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 CWP’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 financial strength of the company. 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 an eye on CWP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

So while earnings quality is important, it's equally important to consider the risks facing Cedar Woods Properties at this point in time. Our analysis shows 3 warning signs for Cedar Woods Properties (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.

If you are no longer interested in Cedar Woods Properties, 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.