At CA$44.03, Is Genworth MI Canada Inc. (TSE:MIC) Worth Looking At Closely?

Devin Koller

Genworth MI Canada Inc. (TSE:MIC), operating in the financial services industry based in Canada, saw a double-digit share price rise of over 10% in the past couple of months on the TSX. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Genworth MI Canada’s outlook and valuation to see if the opportunity still exists.

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What is Genworth MI Canada worth?

Good news, investors! Genworth MI Canada is still a bargain right now. According to my valuation, the intrinsic value for the stock is CA$57.94, but it is currently trading at CA$44.03 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Genworth MI Canada’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Genworth MI Canada generate?

TSX:MIC Future Profit January 21st 19
TSX:MIC Future Profit January 21st 19

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. Though in the case of Genworth MI Canada, it is expected to deliver a negative earnings growth of -8.8%, 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 MIC is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to MIC, 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 an eye on MIC for a while, but hesitant on making the leap, I recommend you dig deeper 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Genworth MI Canada. You can find everything you need to know about Genworth MI Canada in the latest infographic research report. If you are no longer interested in Genworth MI Canada, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.