AS Harju Elekter (TAL:HAE1T), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the TLSE. 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 take a look at AS Harju Elekter’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for AS Harju Elekter
What's the opportunity in AS Harju Elekter?
Good news, investors! AS Harju Elekter is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 19.83x is currently well-below the industry average of 28.99x, meaning that it is trading at a cheaper price relative to its peers. Another thing to keep in mind is that AS Harju Elekter’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from AS Harju Elekter?
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. AS Harju Elekter's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since HAE1T is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive profit 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 price multiple.
Are you a potential investor? If you’ve been keeping an eye on HAE1T for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HAE1T. 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.
Diving deeper into the forecasts for AS Harju Elekter mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in AS Harju Elekter, 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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About TLSE:HAE1T
AS Harju Elekter
Provides electrical power distribution solutions in Estonia, Finland, Sweden, Lithuania, Norway, and internationally.
Excellent balance sheet with proven track record.
