Is Now The Time To Look At Buying Famur S.A. (WSE:FMF)?

Famur S.A. (WSE:FMF), 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 WSE. 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, what if the stock is still a bargain? Let’s examine Famur’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Famur

Is Famur still cheap?

According to my valuation model, Famur seems to be fairly priced at around 1.0% below my intrinsic value, which means if you buy Famur today, you’d be paying a fair price for it. And if you believe the company’s true value is PLN1.95, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Famur’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Famur generate?

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. With profit expected to grow by 90% over the next couple of years, the future seems bright for Famur. 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? FMF’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on FMF, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Famur has 2 warning signs and it would be unwise to ignore them.

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This article by Simply Wall St is general in nature. 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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