When Should You Buy BELIMO Holding AG (VTX:BEAN)?

While BELIMO Holding AG (VTX:BEAN) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF520 at one point, and dropping to the lows of CHF360. 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 BELIMO Holding's current trading price of CHF372 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at BELIMO Holding’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 BELIMO Holding

What is BELIMO Holding worth?

According to my valuation model, the stock is currently overvalued by about 30%, trading at CHF372 compared to my intrinsic value of CHF284.73. Not the best news for investors looking to buy! Another thing to keep in mind is that BELIMO Holding’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will BELIMO Holding generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. BELIMO Holding's earnings over the next few years are expected to increase by 29%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in BEAN’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe BEAN 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 BEAN 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 BEAN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into BELIMO Holding, you'd also look into what risks it is currently facing. When we did our research, we found 2 warning signs for BELIMO Holding (1 is a bit unpleasant!) that we believe deserve your full attention.

If you are no longer interested in BELIMO Holding, 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.