When Should You Buy Jumbo S.A. (ATH:BELA)?

Jumbo S.A. (ATH:BELA), might not be a large cap stock, but it saw significant share price movement during recent months on the ATSE, rising to highs of €29.00 and falling to the lows of €24.78. 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 Jumbo's current trading price of €24.98 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Jumbo’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Jumbo

What's The Opportunity In Jumbo?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15.47% above my intrinsic value, which means if you buy Jumbo today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €21.63, there’s only an insignificant downside when the price falls to its real value. What's more, Jumbo’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Jumbo 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. Jumbo's earnings over the next few years are expected to increase by 34%, 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 already priced in BELA’s positive outlook, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on BELA, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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 Jumbo, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Jumbo, and understanding it should be part of your investment process.

If you are no longer interested in Jumbo, 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.