Why Chargeurs SA (EPA:CRI) Could Be Worth Watching

While Chargeurs SA (EPA:CRI) might not be the most widely known stock at the moment, it led the ENXTPA gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Chargeurs’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Chargeurs

What is Chargeurs worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.69% above my intrinsic value, which means if you buy Chargeurs today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €20.81, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Chargeurs’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Chargeurs 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. 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. However, with a negative profit growth of -12% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Chargeurs. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Currently, CRI appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial 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 tabs on CRI 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 crystalize your views on CRI should the price fluctuate below its true value.

So while earnings quality is important, it's equally important to consider the risks facing Chargeurs at this point in time. Case in point: We've spotted 3 warning signs for Chargeurs you should be aware of.

If you are no longer interested in Chargeurs, 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. 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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