Is It Too Late To Consider Buying Fomento de Construcciones y Contratas, S.A. (BME:FCC)?

Fomento de Construcciones y Contratas, S.A. (BME:FCC), might not be a large cap stock, but it saw a decent share price growth in the teens level on the BME over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Fomento de Construcciones y Contratas’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out the opportunities and risks within the ES Construction industry.

What's The Opportunity In Fomento de Construcciones y Contratas?

Great news for investors – Fomento de Construcciones y Contratas is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €13.70, but it is currently trading at €8.42 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Fomento de Construcciones y Contratas’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 does the future of Fomento de Construcciones y Contratas look like?

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. 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Fomento de Construcciones y Contratas, at least in the near future.

What This Means For You

Are you a shareholder? Although FCC is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to FCC, 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 tabs on FCC for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 5 warning signs for Fomento de Construcciones y Contratas (1 can't be ignored!) and we strongly recommend you look at these before investing.

If you are no longer interested in Fomento de Construcciones y Contratas, 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.