Small cap stocks can be on the riskier side of investing; smaller companies can offer greater risk for sure, but sometimes, even greater reward than big cap companies. One small cap stock has received a lot of attention in recent months. So much so, that prices have fluctuated between highs of $57.75 and lows of $47.53 in the last month alone. The company in question is Comfort Systems USA (NYSE:FIX)—a small cap company with a market cap just over $1.8 billion USD.
Currently, shares are dipping once again so is there an opportunity to buy here?
Small Cap Stocks – Comfort Systems USA
Comfort Systems is an industry leader in installation and service for building and mechanical systems. As summer kicks in, the time is now that plenty of businesses and people are in need of air conditioning systems that work.
It is a giant in its field with dozens of subsidiaries spanning the USA. This type of scale gives the company an edge that its competitors lack. One advantage is that it has the ability to take on bigger and complex projects where others can’t. Think industrial size ventilation systems.
Further, its network of businesses thrive off one another and this helps to deliver growth. Because though it has a market cap shy of $2 billion—putting it securely in small-cap territory—the company is large for the industry it operates in.
Small Cap Stocks – Analysts Weigh-In
According to analyst Chuck Saletta, the fundamentals look promising:
“Over the next five years, Comfort Systems USA is expected to deliver earnings growth at around a 10% annualized rate. When you combine that with the fact that it’s currently trading at around a modest 14 times its anticipated earnings, you get a company that’s a reasonable value for its prospects”.
Further analysts at SimplyWallStreet share the same sentiment:
“Comfort Systems USA seems to be fairly priced at around 19% below my intrinsic value, which means if you buy Comfort Systems USA today, you’d be paying a reasonable price for it”.
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The publication says further that profit is expected to grow by 11% in the coming year. This gives a positive short-term outlook for the company.
But investors may want to hold out a little longer to see if there is a further dip ahead. At $48.95 on the NYSE at present, these small cap stocks are currently in a downward trend which might prove an opportunity based on the near-future expectations.
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