Why Aegion Corporation (NASDAQ:AEGN) Could Be A Buy
Aegion Corporation (NASDAQ:AEGN), a construction company based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Aegion’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Aegion
What’s the opportunity in Aegion?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.62% above my intrinsic value, which means if you buy Aegion today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $23.75, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Aegion’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Aegion?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted revenue growth of 3.22% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Aegion, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in AEGN’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 tabs on AEGN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into 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 Aegion. You can find everything you need to know about Aegion in the latest infographic research report. If you are no longer interested in Aegion, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass 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.
