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

Hapvida Participações e Investimentos S.A. (BVMF:HAPV3) led the BOVESPA gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Hapvida Participações e Investimentos’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Hapvida Participações e Investimentos

What's the opportunity in Hapvida Participações e Investimentos?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.78% 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$11.32, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Hapvida Participações e Investimentos’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Hapvida Participações e Investimentos generate?

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. 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 optimal 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.

If you want to dive deeper into Hapvida Participações e Investimentos, you'd also look into what risks it is currently facing. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Hapvida Participações e Investimentos.

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.

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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.