When Should You Buy Hexagon Composites ASA (OB:HEX)?

Hexagon Composites ASA (OB:HEX), is not the largest company out there, but it received a lot of attention from a substantial price increase on the OB over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Hexagon Composites’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Hexagon Composites

What's The Opportunity In Hexagon Composites?

Great news for investors – Hexagon Composites is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is NOK40.55, but it is currently trading at kr31.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Hexagon Composites’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 Hexagon Composites?

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. Hexagon Composites' revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since HEX is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on HEX for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HEX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you want to dive deeper into Hexagon Composites, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Hexagon Composites you should be mindful of and 1 of these makes us a bit uncomfortable.

If you are no longer interested in Hexagon Composites, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com