Is There Now An Opportunity In Austevoll Seafood ASA (OB:AUSS)?

Austevoll Seafood ASA (OB:AUSS), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the OB. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Austevoll Seafood’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Austevoll Seafood

What Is Austevoll Seafood Worth?

Good news, investors! Austevoll Seafood 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. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Austevoll Seafood’s ratio of 7.17x is below its peer average of 16.36x, which indicates the stock is trading at a lower price compared to the Food industry. Another thing to keep in mind is that Austevoll Seafood’s share price is 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 industry peers, 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 does the future of Austevoll Seafood look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Austevoll Seafood, it is expected to deliver a negative earnings growth of -0.4%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although AUSS is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to AUSS, 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 AUSS for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into Austevoll Seafood, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Austevoll Seafood and we think they deserve your attention.

If you are no longer interested in Austevoll Seafood, 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.