Why Bucher Industries AG (VTX:BUCN) Could Be Worth Watching

Bucher Industries AG (VTX:BUCN), is not the largest company out there, but it saw significant share price movement during recent months on the SWX, rising to highs of CHF427 and falling to the lows of CHF380. 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 Bucher Industries' current trading price of CHF393 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 Bucher Industries’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 Bucher Industries

What's The Opportunity In Bucher Industries?

According to my valuation model, Bucher Industries seems to be fairly priced at around 3.71% above my intrinsic value, which means if you buy Bucher Industries today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CHF379.13, there’s only an insignificant downside when the price falls to its real value. In addition to this, Bucher Industries has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Bucher Industries 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 -5.1% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Bucher Industries. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Currently, BUCN appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BUCN for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on BUCN should the price fluctuate below its true value.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Bucher Industries (including 2 which don't sit too well with us).

If you are no longer interested in Bucher Industries, 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.