When Should You Buy Rubis (EPA:RUI)?

While Rubis (EPA:RUI) 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. 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 Rubis’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Rubis

What is Rubis worth?

According to my valuation model, the stock is currently overvalued by about 40%, trading at €37.44 compared to my intrinsic value of €26.81. This means that the opportunity to buy Rubis at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Rubis’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from Rubis?

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. Rubis' earnings over the next few years are expected to increase by 93%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in RUI’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe RUI should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on RUI for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for RUI, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Rubis as a business, it's important to be aware of any risks it's facing. For example - Rubis has 4 warning signs we think you should be aware of.

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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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