Is There Now An Opportunity In ASBISc Enterprises Plc (WSE:ASB)?

ASBISc Enterprises Plc (WSE:ASB), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the WSE over the last few months. Less-covered, small caps tend to present 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 ASBISc Enterprises’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for ASBISc Enterprises

What Is ASBISc Enterprises Worth?

Great news for investors – ASBISc Enterprises is still trading at a fairly cheap price 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 ASBISc Enterprises’s ratio of 2.22x is below its peer average of 9.15x, which indicates the stock is trading at a lower price compared to the Electronic industry. ASBISc Enterprises’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of ASBISc Enterprises look like?

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 ASBISc Enterprises, it is expected to deliver a negative revenue growth of -7.6% over the next couple of years, 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 ASB is currently trading below the industry PE ratio, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to ASB, 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 an eye on ASB for a while, but hesitant on making the leap, I recommend you research further 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 ASBISc Enterprises, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with ASBISc Enterprises, and understanding it should be part of your investment process.

If you are no longer interested in ASBISc Enterprises, 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.