Why Prosegur Compañía de Seguridad, S.A. (BME:PSG) Could Be Worth Watching

Prosegur Compañía de Seguridad, S.A. (BME:PSG), is not the largest company out there, but it received a lot of attention from a substantial price increase on the BME over the last few months. With many analysts covering the 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? Today I will analyse the most recent data on Prosegur Compañía de Seguridad’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Prosegur Compañía de Seguridad

What Is Prosegur Compañía de Seguridad Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.17% above my intrinsic value, which means if you buy Prosegur Compañía de Seguridad today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €1.72, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Prosegur Compañía de Seguridad’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Prosegur Compañía de Seguridad generate?

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. With profit expected to more than double over the next couple of years, the future seems bright for Prosegur Compañía de Seguridad. 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 PSG’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on PSG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you want to dive deeper into Prosegur Compañía de Seguridad, you'd also look into what risks it is currently facing. To that end, you should learn about the 2 warning signs we've spotted with Prosegur Compañía de Seguridad (including 1 which shouldn't be ignored).

If you are no longer interested in Prosegur Compañía de Seguridad, 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.