When Should You Buy Dätwyler Holding AG (VTX:DAE)?

Dätwyler Holding AG (VTX:DAE), might not be a large cap stock, but it saw a decent share price growth in the teens level on the SWX over the last few months. 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? Let’s take a look at Dätwyler Holding’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Dätwyler Holding

What Is Dätwyler Holding Worth?

The share price seems sensible at the moment 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 28.71x is currently trading slightly below its industry peers’ ratio of 29.1x, which means if you buy Dätwyler Holding today, you’d be paying a reasonable price for it. And if you believe Dätwyler Holding should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since Dätwyler Holding’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What Kind Of Returns Can We Expect From Dätwyler Holding In The Future?

What kind of returns can we expect from Dätwyler Holding in the future? It’s one thing to get a stock at a low price, but the quality of the company is even more important, as its stock may be cheap or expensive for a reason. A way to assess stock quality is by looking how much it returns to you as the investor compared to how much you’re invested. Dätwyler Holding is expected to return 32% of your investment in the next couple of years if you buy the stock today. This is a solid return on your investment which builds up the case for owning the stock.

What This Means For You

Are you a shareholder? DAE’s optimistic future return appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of the company’s management team. Has anything significant changed since the last time you examined DAE? And will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on DAE for a while, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the high returns are encouraging for DAE, which means it’s worth further examining other factors such as the track record of its management team, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Dätwyler Holding at this point in time. When we did our research, we found 3 warning signs for Dätwyler Holding (2 make us uncomfortable!) that we believe deserve your full attention.

If you are no longer interested in Dätwyler 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.