What Does Beijer Ref AB (publ)'s (STO:BEIJ B) Share Price Indicate?
Beijer Ref AB (publ) (STO:BEIJ B), which is in the trade distributors business, and is based in Sweden, saw a decent share price growth in the teens level on the OM over the last few months. As a kr36b market cap stock, it seems odd Beijer Ref is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s take a look at Beijer Ref’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Beijer Ref
Is Beijer Ref still cheap?
Beijer Ref is currently overpriced based on my relative valuation model. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Beijer Ref’s ratio of 41.83x is above its peer average of 15.03x, which suggests the stock is overvalued compared to the Trade Distributors industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Beijer Ref’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 kind of growth will Beijer Ref generate?
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. With profit expected to grow by 26% over the next couple of years, the future seems bright for Beijer Ref. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in BEIJ B’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe BEIJ B should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. 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 an eye on BEIJ B for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for BEIJ B, which means it’s worth diving deeper into other factors 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 Beijer Ref. You can find everything you need to know about Beijer Ref in the latest infographic research report. If you are no longer interested in Beijer Ref, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
