Should You Think About Buying ACS, Actividades de Construcción y Servicios, S.A. (BME:ACS) Now?

Today we're going to take a look at the well-established ACS, Actividades de Construcción y Servicios, S.A. (BME:ACS). The company's stock led the BME gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at ACS Actividades de Construcción y Servicios’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for ACS Actividades de Construcción y Servicios

What's The Opportunity In ACS Actividades de Construcción y Servicios?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 4.0% below our intrinsic value, which means if you buy ACS Actividades de Construcción y Servicios today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €41.66, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since ACS Actividades de Construcción y Servicios’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 ACS Actividades de Construcción y Servicios generate?

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 a double-digit 12% over the next couple of years, the outlook is positive for ACS Actividades de Construcción y Servicios. 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? It seems like the market has already priced in ACS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on ACS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Every company has risks, and we've spotted 3 warning signs for ACS Actividades de Construcción y Servicios you should know about.

If you are no longer interested in ACS Actividades de Construcción y Servicios, 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.