At €30.40, Is It Time To Put OCI N.V. (AMS:OCI) On Your Watch List?

OCI N.V. (AMS:OCI), might not be a large cap stock, but it saw significant share price movement during recent months on the ENXTAM, rising to highs of €40.58 and falling to the lows of €29.90. 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 OCI's current trading price of €30.40 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 OCI’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 OCI

What's The Opportunity In OCI?

Good news, investors! OCI is still a bargain right now. According to my valuation, the intrinsic value for the stock is €38.94, but it is currently trading at €30.40 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that OCI’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will OCI 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for OCI, at least in the near future.

What This Means For You

Are you a shareholder? Although OCI is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to OCI, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on OCI for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 3 warning signs for OCI (1 can't be ignored) you should be familiar with.

If you are no longer interested in OCI, 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.