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Jensen-Group NV (EBR:JEN), might not be a large cap stock, but it saw significant share price movement during recent months on the ENXTBR, rising to highs of €25.00 and falling to the lows of €20.50. 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 Jensen-Group's current trading price of €21.50 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 Jensen-Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Jensen-Group
Is Jensen-Group still cheap?
Great news for investors – Jensen-Group is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 10.62x is currently well-below the industry average of 18.71x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Jensen-Group’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, 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 Jensen-Group generate?
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 -1.6% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Jensen-Group. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although JEN is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to JEN, 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 JEN for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Diving deeper into the forecasts for Jensen-Group mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.
If you are no longer interested in Jensen-Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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About ENXTBR:JEN
Jensen-Group
Designs, produces, and supplies single machines, systems, turnkey solutions, and laundry process automation for the heavy-duty laundry industry.
Flawless balance sheet with solid track record.
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