When Should You Buy Wilh. Wilhelmsen Holding ASA (OB:WWI)?

Wilh. Wilhelmsen Holding ASA (OB:WWI), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the OB. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Wilh. Wilhelmsen Holding’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Wilh. Wilhelmsen Holding

What Is Wilh. Wilhelmsen Holding 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 Wilh. Wilhelmsen Holding’s ratio of 5.61x is trading slightly above its industry peers’ ratio of 4.82x, which means if you buy Wilh. Wilhelmsen Holding today, you’d be paying a relatively reasonable price for it. And if you believe that Wilh. Wilhelmsen Holding should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, Wilh. Wilhelmsen Holding’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.

What kind of growth will Wilh. Wilhelmsen Holding generate?

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. With profit expected to grow by 54% over the next couple of years, the future seems bright for Wilh. Wilhelmsen Holding. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in WWI’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 WWI? 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 an eye on WWI, 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 WWI, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Wilh. Wilhelmsen Holding, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Wilh. Wilhelmsen Holding has 1 warning sign and it would be unwise to ignore this.

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

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

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.