When Should You Buy Bastei Lübbe AG (ETR:BST)?

Bastei Lübbe AG (ETR:BST), is not the largest company out there, but it received a lot of attention from a substantial price increase on the XTRA over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Bastei Lübbe’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Bastei Lübbe

What is Bastei Lübbe worth?

Good news, investors! Bastei Lübbe is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €6.54, but it is currently trading at €5.16 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Bastei Lübbe’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 growth will Bastei Lübbe generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. With profit expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for Bastei Lübbe. 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 BST is currently undervalued, it may be a great time to accumulate more of 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 capital structure to consider, which could explain the current undervaluation.

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

If you'd like to know more about Bastei Lübbe as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Bastei Lübbe and you'll want to know about them.

If you are no longer interested in Bastei Lübbe, 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. 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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