ABO Wind AG (ETR:AB9), is not the largest company out there, but it saw significant share price movement during recent months on the XTRA, rising to highs of €57.20 and falling to the lows of €44.00. 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 ABO Wind's current trading price of €44.70 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 ABO Wind’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 ABO Wind
What's The Opportunity In ABO Wind?
The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. 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 ABO Wind’s ratio of 17.27x is trading in-line with its industry peers’ ratio, which means if you buy ABO Wind today, you’d be paying a relatively sensible price for it. Is there another opportunity to buy low in the future? Since ABO Wind’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 ABO Wind?
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. 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. With profit expected to grow by 22% over the next couple of years, the future seems bright for ABO Wind. 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 already priced in AB9’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at AB9? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?