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At kr56.80, Is It Time To Put ByggPartner i Dalarna Holding AB (publ) (STO:BYGGP) On Your Watch List?

Simply Wall St

ByggPartner i Dalarna Holding AB (publ) (STO:BYGGP), which is in the construction business, and is based in Sweden, led the OM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at ByggPartner i Dalarna Holding’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for ByggPartner i Dalarna Holding

Is ByggPartner i Dalarna Holding still cheap?

Great news for investors – ByggPartner i Dalarna Holding is still trading at a fairly cheap price. 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 ByggPartner i Dalarna Holding’s ratio of 13.4x is below its peer average of 18.43x, which suggests the stock is undervalued compared to the Construction industry. What’s more interesting is that, ByggPartner i Dalarna Holding’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will ByggPartner i Dalarna Holding generate?

OM:BYGGP Past and Future Earnings, January 25th 2020

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. ByggPartner i Dalarna Holding’s earnings over the next few years are expected to increase by 46%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since BYGGP is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on BYGGP for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BYGGP. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, 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 ByggPartner i Dalarna Holding. You can find everything you need to know about ByggPartner i Dalarna Holding in the latest infographic research report. If you are no longer interested in ByggPartner i Dalarna Holding, 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.