While Boise Cascade Company (NYSE:BCC) might not have the largest market cap around , it saw significant share price movement during recent months on the NYSE, rising to highs of US$153 and falling to the lows of US$125. 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 Boise Cascade's current trading price of US$138 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Boise Cascade's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Boise Cascade Still Cheap?
According to our valuation model, the stock is currently overvalued by about 24%, trading at US$138 compared to our intrinsic value of $110.62. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Boise Cascade'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 Boise Cascade 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. However, with a negative profit growth of -8.5% expected over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for Boise Cascade. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? If you believe BCC is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. 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 tabs on BCC for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. When we did our research, we found 3 warning signs for Boise Cascade (1 shouldn't be ignored!) that we believe deserve your full attention.
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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.