Is Now The Time To Look At Buying Mowi ASA (OB:MOWI)?

Mowi ASA (OB:MOWI), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the OB over the last few months, increasing to kr237 at one point, and dropping to the lows of kr134. 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 Mowi's current trading price of kr143 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 Mowi’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 Mowi

What Is Mowi Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare 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 Mowi’s ratio of 10.48x is trading slightly below its industry peers’ ratio of 12.25x, which means if you buy Mowi today, you’d be paying a decent price for it. And if you believe that Mowi should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Furthermore, Mowi’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Can we expect growth from Mowi?

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. Mowi's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MOWI’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at MOWI? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on MOWI, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for MOWI, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

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. When we did our research, we found 2 warning signs for Mowi (1 is concerning!) that we believe deserve your full attention.

If you are no longer interested in Mowi, 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.