Is There Now An Opportunity In Boston Pizza Royalties Income Fund (TSE:BPF.UN)?

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Boston Pizza Royalties Income Fund (TSE:BPF.UN), is not the largest company out there, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$17.57 and falling to the lows of CA$15.23. 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 Boston Pizza Royalties Income Fund’s current trading price of CA$15.30 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 Boston Pizza Royalties Income Fund’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Boston Pizza Royalties Income Fund

Is Boston Pizza Royalties Income Fund still cheap?

Good news, investors! Boston Pizza Royalties Income Fund is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$22.40, but it is currently trading at CA$15.30 on the share market, meaning that there is still an opportunity to buy now. However, given that Boston Pizza Royalties Income Fund’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.

Can we expect growth from Boston Pizza Royalties Income Fund?

earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Though in the case of Boston Pizza Royalties Income Fund, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although BPF.UN is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to BPF.UN, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on BPF.UN for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into Boston Pizza Royalties Income Fund, you’d also look into what risks it is currently facing. For example, we’ve found that Boston Pizza Royalties Income Fund has 4 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Boston Pizza Royalties Income Fund, 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.