Ansaldo STS SpA (BIT:STS), a infrastructure company based in Italy, saw its share price hover around a small range of €12.12 to €12.8 over the last few weeks. But is this actually reflective of the share value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ansaldo STS’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 Ansaldo STS
Is Ansaldo STS still cheap?Ansaldo STS appears to be overvalued by 84.28% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €12.30 on the market compared to my intrinsic value of €6.67. This means that the opportunity to buy Ansaldo STS at a good price has disappeared! Furthermore, Ansaldo STS’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Ansaldo STS look like?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 63.44% over the next couple of years, the future seems bright for Ansaldo STS. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in STS’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 STS 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 STS 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 STS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Ansaldo STS. You can find everything you need to know about Ansaldo STS in the latest infographic research report. If you are no longer interested in Ansaldo STS, you can use our free platform to see my list of over 50 other stocks with a high growth potential.