At zł92.00, Is It Time To Put Amica S.A. (WSE:AMC) On Your Watch List?

Amica S.A. (WSE:AMC), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the WSE over the last few months, increasing to zł130 at one point, and dropping to the lows of zł92.00. 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 Amica's current trading price of zł92.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Amica’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 Amica

Is Amica still cheap?

According to my valuation model, Amica seems to be fairly priced at around 13.51% above my intrinsic value, which means if you buy Amica today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth PLN81.05, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Amica’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Amica generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Amica, it is expected to deliver a relatively unexciting top-line growth of 2.6% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? AMC’s 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 an eye on AMC, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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'd like to know more about Amica as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 3 warning signs we've spotted with Amica (including 1 which doesn't sit too well with us).

If you are no longer interested in Amica, 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.