Is Now The Time To Look At Buying Hapvida Participações e Investimentos S.A. (BVMF:HAPV3)?

Hapvida Participações e Investimentos S.A. (BVMF:HAPV3), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the BOVESPA. 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, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Hapvida Participações e Investimentos’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Hapvida Participações e Investimentos

What's the opportunity in Hapvida Participações e Investimentos?

According to my valuation model, Hapvida Participações e Investimentos seems to be fairly priced at around 6.97% above my intrinsic value, which means if you buy Hapvida Participações e Investimentos today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is R$11.98, there’s only an insignificant downside when the price falls to its real value. What's more, Hapvida Participações e Investimentos’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Hapvida Participações e Investimentos?

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. Hapvida Participações e Investimentos' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in HAPV3’s positive 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on HAPV3, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. In terms of investment risks, we've identified 3 warning signs with Hapvida Participações e Investimentos, and understanding them should be part of your investment process.

If you are no longer interested in Hapvida Participações e Investimentos, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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