Acciona SA. (BME:ANA), a electric utilities company based in Spain, saw a double-digit share price rise of over 10% in the past couple of months on the BME. 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. However, what if the stock is still a bargain? Today I will analyse the most recent data on Acciona’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Acciona
What’s the opportunity in Acciona?The stock is currently trading at €67.86 on the share market, which means it is overvalued by 38% compared to my intrinsic value of €49.25. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Acciona’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.
Can we expect growth from Acciona?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. With profit expected to grow by 23.71% over the next couple of years, the future seems bright for Acciona. It looks like higher cash flows 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 well and truly priced in ANA’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe ANA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on ANA for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for ANA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Acciona. You can find everything you need to know about Acciona in the latest infographic research report. If you are no longer interested in Acciona, you can use our free platform to see my list of over 50 other stocks with a high growth potential.