Is Now An Opportune Moment To Examine Reka Industrial Oyj (HEL:REKA)?

Reka Industrial Oyj (HEL:REKA), is not the largest company out there, but it saw a decent share price growth in the teens level on the HLSE over the last few months. 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? Let’s take a look at Reka Industrial Oyj’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Reka Industrial Oyj

What is Reka Industrial Oyj worth?

Great news for investors – Reka Industrial Oyj is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €5.62, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Reka Industrial Oyj’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 kind of growth will Reka Industrial Oyj 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. However, with a relatively muted profit growth of 5.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Reka Industrial Oyj, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since REKA is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on REKA for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy REKA. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with Reka Industrial Oyj (including 1 which doesn't sit too well with us).

If you are no longer interested in Reka Industrial Oyj, 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.