Should You Think About Buying HELLA GmbH & Co. KGaA (ETR:HLE) Now?

By
Simply Wall St
Published
March 18, 2020

HELLA GmbH & Co. KGaA (ETR:HLE), which is in the auto components business, and is based in Germany, saw significant share price movement during recent months on the XTRA, rising to highs of €50.55 and falling to the lows of €22.84. 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 HELLA GmbH KGaA's current trading price of €22.84 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 HELLA GmbH KGaA’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for HELLA GmbH KGaA

What's the opportunity in HELLA GmbH KGaA?

Good news, investors! HELLA GmbH KGaA is still a bargain right now. According to my valuation, the intrinsic value for the stock is €36.10, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because HELLA GmbH KGaA’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from HELLA GmbH KGaA?

XTRA:HLE Past and Future Earnings, March 18th 2020

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. With profit expected to grow by 28% over the next couple of years, the future seems bright for HELLA GmbH KGaA. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since HLE is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on HLE for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HLE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on HELLA GmbH KGaA. You can find everything you need to know about HELLA GmbH KGaA in the latest infographic research report. If you are no longer interested in HELLA GmbH KGaA, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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