Is Now An Opportune Moment To Examine Raisio plc (HEL:RAIVV)?

Raisio plc (HEL:RAIVV), is not the largest company out there, but it received a lot of attention from a substantial price increase on the HLSE over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Raisio’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Raisio

What's the opportunity in Raisio?

According to my valuation model, Raisio seems to be fairly priced at around 0.8% below my intrinsic value, which means if you buy Raisio today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €3.79, then there’s not much of an upside to gain from mispricing. Furthermore, Raisio’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Raisio?

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 25% over the next couple of years, the future seems bright for Raisio. 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? RAIVV’s optimistic future growth appears to have been factored into the current share price, 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 RAIVV, 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 further examining 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 Raisio, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Raisio, and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. 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.
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