Stock Analysis

Is Now An Opportune Moment To Examine Clas Ohlson AB (publ) (STO:CLAS B)?

OM:CLAS B
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Clas Ohlson AB (publ) (STO:CLAS B), 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 OM. 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? Let’s examine Clas Ohlson’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Clas Ohlson

Is Clas Ohlson still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13% below my intrinsic value, which means if you buy Clas Ohlson today, you’d be paying a fair price for it. And if you believe the company’s true value is SEK104.23, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Clas Ohlson has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Clas Ohlson generate?

earnings-and-revenue-growth
OM:CLAS B Earnings and Revenue Growth May 1st 2021

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Clas Ohlson's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? CLAS B’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 CLAS B, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

Diving deeper into the forecasts for Clas Ohlson mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

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Valuation is complex, but we're helping make it simple.

Find out whether Clas Ohlson is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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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