When Should You Buy Zardoya Otis, S.A. (BME:ZOT)?
Zardoya Otis, S.A. (BME:ZOT), which is in the machinery business, and is based in Spain, saw significant share price movement during recent months on the BME, rising to highs of €8.21 and falling to the lows of €5.9. 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 Zardoya Otis’s current trading price of €6 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 Zardoya Otis’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 Zardoya Otis
What is Zardoya Otis worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14.16% above my intrinsic value, which means if you buy Zardoya Otis today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €5.26, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Zardoya Otis’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 Zardoya Otis look like?
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. 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. Zardoya Otis’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ZOT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 ZOT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Zardoya Otis. You can find everything you need to know about Zardoya Otis in the latest infographic research report. If you are no longer interested in Zardoya Otis, 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.
