Is BE Semiconductor Industries N.V. (AMS:BESI) Potentially Undervalued?

BE Semiconductor Industries N.V. (AMS:BESI), which is in the semiconductor business, and is based in Netherlands, saw a significant share price rise of over 20% in the past couple of months on the ENXTAM. 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. But what if there is still an opportunity to buy? Today I will analyse the most recent data on BE Semiconductor Industries’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for BE Semiconductor Industries

What is BE Semiconductor Industries worth?

The stock is currently trading at €27.30 on the share market, which means it is overvalued by 26.5% compared to my intrinsic value of €21.58. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that BE Semiconductor Industries’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will BE Semiconductor Industries generate?

ENXTAM:BESI Past and Future Earnings, April 24th 2019
ENXTAM:BESI Past and Future Earnings, April 24th 2019
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 a relatively muted profit growth of 5.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for BE Semiconductor Industries, at least in the short term.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in BESI’s future outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe BESI 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 an eye on BESI for a while, 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 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 BE Semiconductor Industries. You can find everything you need to know about BE Semiconductor Industries in the latest infographic research report. If you are no longer interested in BE Semiconductor Industries, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.