Dätwyler Holding Inc. (VTX:DAE), which is in the machinery business, and is based in Switzerland, saw a decent share price growth in the teens level on the SWX over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Dätwyler Holding’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What is Dätwyler Holding worth?
Dätwyler Holding appears to be overvalued by 33% at the moment, based on my discounted cash flow valuation. The stock is currently priced at CHF170 on the market compared to my intrinsic value of CHF127.45. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Given that Dätwyler Holding’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 does the future of Dätwyler Holding look like?
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 a double-digit 16% over the next couple of years, the outlook is positive for Dätwyler Holding. 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 DAE’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 DAE 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 tabs on DAE for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for DAE, 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 Dätwyler Holding. You can find everything you need to know about Dätwyler Holding in the latest infographic research report. If you are no longer interested in Dätwyler 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 firstname.lastname@example.org. 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.