Should You Think About Buying Havyard Group ASA (OB:HYARD) Now?

Havyard Group ASA (OB:HYARD), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the OB. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Havyard Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Havyard Group

Is Havyard Group still cheap?

Good news, investors! Havyard Group is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 1.95x is currently well-below the industry average of 8.46x, meaning that it is trading at a cheaper price relative to its peers. However, given that Havyard Group’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 returns can we expect from Havyard Group in the future?

Valuation is only one aspect of forming your investment views on Havyard Group. Another thing to consider is whether it is actually a high-quality company. The best type of investment is always in a great company, producing robust returns at a cheap price. We can determine the quality of a stock many ways; one way is to look at how much return it generates relative to the money we’ve invested in the stock. Havyard Group is expected to return 39% of your investment next year if you buy the stock today. This is a great return on your investment which builds up the case for owning the stock.

What this means for you:

Are you a shareholder? Since HYARD is currently trading below the industry PE ratio, it may be a great time to accumulate more of 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 financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on HYARD for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HYARD. 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 assessment.

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. In terms of investment risks, we've identified 3 warning signs with Havyard Group, and understanding these should be part of your investment process.

If you are no longer interested in Havyard Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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