H&R GmbH & Co. KGaA (FRA:2HRA), which is in the chemicals business, and is based in Germany, received a lot of attention from a substantial price movement on the DB over the last few months, increasing to €7.75 at one point, and dropping to the lows of €5.93. 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 H&R GmbH KGaA's current trading price of €6.5 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 H&R GmbH KGaA’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is H&R GmbH KGaA still cheap?
Good news, investors! H&R GmbH KGaA is still a bargain right now. 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 H&R GmbH KGaA’s ratio of 14.25x is below its peer average of 19.58x, which suggests the stock is undervalued compared to the Chemicals industry. What’s more interesting is that, H&R GmbH KGaA’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.
Can we expect growth from H&R GmbH KGaA?
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. H&R GmbH KGaA’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? Since 2HRA is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on 2HRA for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 2HRA. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on H&R GmbH KGaA. You can find everything you need to know about H&R GmbH KGaA in the latest infographic research report. If you are no longer interested in H&R GmbH KGaA, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.