When Should You Buy DIC Asset AG (ETR:DIC)?

April 23, 2022
  •  Updated
August 13, 2022
XTRA:DIC
Source: Shutterstock

DIC Asset AG (ETR:DIC), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €15.76 at one point, and dropping to the lows of €13.63. 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 DIC Asset's current trading price of €13.72 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at DIC Asset’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 DIC Asset

What's the opportunity in DIC Asset?

According to my valuation model, the stock is currently overvalued by about 30%, trading at €13.72 compared to my intrinsic value of €10.56. This means that the opportunity to buy DIC Asset at a good price has disappeared! But, is there another opportunity to buy low in the future? Since DIC Asset’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 does the future of DIC Asset look like?

earnings-and-revenue-growth
XTRA:DIC Earnings and Revenue Growth April 23rd 2022

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 72% over the next couple of years, the future seems bright for DIC Asset. 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? DIC’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe DIC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on DIC for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for DIC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into DIC Asset, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for DIC Asset (2 are a bit concerning) you should be familiar with.

If you are no longer interested in DIC Asset, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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About XTRA:DIC

DIC Asset

DIC Asset AG is one of Germany's leading listed property companies, and specialises in commercial real estate.

Established dividend payer with questionable track record.