Is It Too Late To Consider Buying AS Silvano Fashion Group (TAL:SFG1T)?

AS Silvano Fashion Group (TAL:SFG1T), might not be a large cap stock, but it led the TLSE gainers with a relatively large price hike in the past couple of weeks. 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? Today I will analyse the most recent data on AS Silvano Fashion Group’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for AS Silvano Fashion Group

What is AS Silvano Fashion Group worth?

Good news, investors! AS Silvano Fashion Group 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. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that AS Silvano Fashion Group’s ratio of 3.85x is below its peer average of 13.63x, which indicates the stock is trading at a lower price compared to the Specialty Retail industry. However, given that AS Silvano Fashion Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of AS Silvano Fashion Group look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a negative profit growth of -9.2% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for AS Silvano Fashion Group. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although SFG1T is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to SFG1T, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on SFG1T for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into AS Silvano Fashion Group, you'd also look into what risks it is currently facing. To help with this, we've discovered 3 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in AS Silvano Fashion Group.

If you are no longer interested in AS Silvano Fashion Group, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.