Schweiter Technologies AG (VTX:SWTQ), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF1,632 at one point, and dropping to the lows of CHF1,410. 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 Schweiter Technologies' current trading price of CHF1,446 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 Schweiter Technologies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Schweiter Technologies
What's the opportunity in Schweiter Technologies?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.0% below my intrinsic value, which means if you buy Schweiter Technologies today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CHF1506.52, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Schweiter Technologies’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will Schweiter Technologies 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. However, with a negative profit growth of -1.1% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Schweiter Technologies. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? SWTQ seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial 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 tabs on SWTQ 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 SWTQ should the price fluctuate below its true value.
If you want to dive deeper into Schweiter Technologies, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Schweiter Technologies and we think they deserve your attention.
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This article by Simply Wall St is general in nature. 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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About SWX:SWTQ
Schweiter Technologies
Develops, produces, and sells composite materials and solutions in lightweight construction in Europe, the Americas, Asia, and internationally.
Undervalued with excellent balance sheet.
