Should You Investigate Savencia SA (EPA:SAVE) At €61.80?

While Savencia SA (EPA:SAVE) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €67.00 at one point, and dropping to the lows of €60.20. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Savencia's current trading price of €61.80 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Savencia’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Savencia

What is Savencia worth?

According to my valuation model, Savencia seems to be fairly priced at around 0.88% above my intrinsic value, which means if you buy Savencia today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €61.26, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Savencia has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Savencia 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. However, with a negative profit growth of -3.0% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Savencia. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Currently, SAVE 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 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 SAVE for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, 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 SAVE should the price fluctuate below its true value.

If you'd like to know more about Savencia as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Savencia you should know about.

If you are no longer interested in Savencia, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.