Is It Too Late To Consider Buying Lifco AB (publ) (STO:LIFCO B)?

Lifco AB (publ) (STO:LIFCO B), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the OM over the last few months. As a kr84b market-cap stock, it seems odd Lifco is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s take a look at Lifco’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Lifco

Is Lifco Still Cheap?

Lifco appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and 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 Lifco’s ratio of 30.34x is above its peer average of 18.66x, which suggests the stock is trading at a higher price compared to the Industrials industry. But, is there another opportunity to buy low in the future? Given that Lifco’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Lifco 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. Though in the case of Lifco, it is expected to deliver a relatively unexciting earnings growth of 0.6%, 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? LIFCO B’s future growth appears to have been factored into the current share price, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe LIFCO B should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on LIFCO B for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Lifco as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for Lifco you should be mindful of and 1 of them is potentially serious.

If you are no longer interested in Lifco, 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.