Why Kemira Oyj (HEL:KEMIRA) Could Be Worth Watching

Kemira Oyj (HEL:KEMIRA), 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. 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 Kemira Oyj’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Kemira Oyj

Is Kemira Oyj Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.1% below my intrinsic value, which means if you buy Kemira Oyj today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €17.61, then there’s not much of an upside to gain from mispricing. What's more, Kemira Oyj’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Kemira Oyj 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. Though in the case of Kemira Oyj, it is expected to deliver a negative earnings growth of -13%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? KEMIRA seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on KEMIRA for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on KEMIRA should the price fluctuate below its true value.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example - Kemira Oyj has 1 warning sign we think you should be aware of.

If you are no longer interested in Kemira 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.