What Does Minesto AB (publ)'s (STO:MINEST) Share Price Indicate?

Minesto AB (publ) (STO:MINEST), is not the largest company out there, but it saw a decent share price growth in the teens level on the OM over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Minesto’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Minesto

What is Minesto worth?

According to my valuation model, Minesto seems to be fairly priced at around 1.6% below my intrinsic value, which means if you buy Minesto today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth SEK27.96, then there’s not much of an upside to gain from mispricing. Furthermore, Minesto’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Minesto?

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. Minesto's earnings over the next few years are expected to increase by 63%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? MINEST’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 MINEST, 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 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 Minesto as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 3 warning signs with Minesto, and understanding these should be part of your investment process.

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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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