Is Now The Time To Look At Buying Seri Industrial S.p.A. (BIT:SERI)?

June 08, 2021
  •  Updated
August 16, 2022
BIT:SERI
Source: Shutterstock

Seri Industrial S.p.A. (BIT:SERI), is not the largest company out there, but it received a lot of attention from a substantial price increase on the BIT over the last few months. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Seri Industrial’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Seri Industrial

What is Seri Industrial worth?

According to my valuation model, Seri Industrial seems to be fairly priced at around 10.0% below my intrinsic value, which means if you buy Seri Industrial today, you’d be paying a fair price for it. And if you believe the company’s true value is €9.16, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Seri Industrial’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 Seri Industrial?

earnings-and-revenue-growth
BIT:SERI Earnings and Revenue Growth June 9th 2021

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. With revenue expected to more than double in the next few years, the future appears to be extremely bright for Seri Industrial. If expenses can also be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? SERI’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on SERI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 2 warning signs for Seri Industrial and we think they deserve your attention.

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About BIT:SERI

Seri Industrial

Seri Industrial S.p.A., through its subsidiaries, engages in the production and recycling of plastic materials for the electric accumulators, automotive, hydro-thermo-sanitary, civil, and naval shipbuilding markets.

High growth potential with mediocre balance sheet.