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Is It Too Late To Consider Buying Fresenius Medical Care AG & Co. KGaA (ETR:FME)?

Simply Wall St

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Let's talk about the popular Fresenius Medical Care AG & Co. KGaA (ETR:FME). The company's shares received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €76.32 at one point, and dropping to the lows of €65.28. 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 Fresenius Medical Care KGaA's current trading price of €68.12 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Fresenius Medical Care KGaA’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 Fresenius Medical Care KGaA

What is Fresenius Medical Care KGaA worth?

Good news, investors! Fresenius Medical Care KGaA is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €93.24, but it is currently trading at €68.12 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Fresenius Medical Care KGaA’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Fresenius Medical Care KGaA generate?

XTRA:FME Past and Future Earnings, July 18th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -18% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Fresenius Medical Care KGaA. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although FME is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to FME, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on FME for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Fresenius Medical Care KGaA. You can find everything you need to know about Fresenius Medical Care KGaA in the latest infographic research report. If you are no longer interested in Fresenius Medical Care KGaA, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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.

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. Thank you for reading.