Schaffner Holding AG (VTX:SAHN), is a CHF200.64m small-cap, which operates in the tech hardware industry based in Switzerland. Whether it’s the next big thing in tech such as artificial intelligence and robotics, or an alliance with a partner in another industry, for example healthcare or manufacturing, tech companies have plenty of opportunities for their companies to thrive. Tech analysts are forecasting for the entire hardware tech industry, negative growth in the upcoming year , and a massive triple-digit earnings growth over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the CH stock market as a whole. Should your portfolio be overweight in the tech sector at the moment? Below, I will examine the sector growth prospects, as well as evaluate whether Schaffner Holding is lagging or leading its competitors in the industry.
What’s the catalyst for Schaffner Holding’s sector growth?
US-based mega-competitors have been, and continue to be, the key drivers of industry growth. Many tech companies are repositioning themselves by focusing on high-growth areas such as IBM’s artificial intelligence play in Watson and Adobe’s shift to marketing its product for cloud computing. In the previous year, the industry saw growth in the twenties, beating the CH market growth of 10.34%. Schaffner Holding leads the pack with its impressive earnings growth of over 100% last year. Furthermore, analysts are expecting this trend of above-industry growth to continue, with Schaffner Holding poised to deliver a 29.26% growth over the next couple of years compared to the industry’s -0.01%. This growth is a median of profitable companies of 13 Electronic companies in CH including Basler, AT & S Austria Technologie & Systemtechnik and Comet Holding. This growth may make Schaffner Holding a more expensive stock relative to its peers.
Is Schaffner Holding and the sector relatively cheap?
The tech hardware sector’s PE is currently hovering around 25.12x, in-line with the CH stock market PE of 21.34x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. Furthermore, the industry returned a similar 13.32% on equities compared to the market’s 12.00%. On the stock-level, Schaffner Holding is trading at a PE ratio of 23.51x, which is relatively in-line with the average tech hardware stock. In terms of returns, Schaffner Holding generated 15.30% in the past year, which is 1.98% over the tech hardware sector.
Schaffner Holding’s industry-beating future is a positive for shareholders, indicating they’ve backed a fast-growing horse. However, this high growth prospect is most likely factored into the share price, given the stock is trading in-line with its peers. If Schaffner Holding has been on your watchlist for a while, now may be the time to enter into the stock. If you like its growth prospects, you’ll be paying a fair value for the company. However, if you’re hoping to gain from an undervalued mispricing, this is probably not the best time. However, before you make a decision on the stock, I suggest you look at Schaffner Holding’s fundamentals in order to build a holistic investment thesis.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Historical Track Record: What has SAHN’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Schaffner Holding? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.