Is Now The Time To Look At Buying Alcadon Group AB (publ) (STO:ALCA)?

Alcadon Group AB (publ) (STO:ALCA), might not be a large cap stock, but it saw significant share price movement during recent months on the OM, rising to highs of kr30.20 and falling to the lows of kr24.30. 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 Alcadon Group's current trading price of kr26.60 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 Alcadon Group’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 Alcadon Group

Is Alcadon Group still cheap?

According to my valuation model, Alcadon Group seems to be fairly priced at around 15% below my intrinsic value, which means if you buy Alcadon Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth SEK31.41, then there’s not much of an upside to gain from mispricing. In addition to this, Alcadon Group has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Alcadon Group look like?

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. With profit expected to grow by 59% over the next couple of years, the future seems bright for Alcadon Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in ALCA’s positive outlook, 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 ALCA, 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 Alcadon Group 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 Alcadon Group you should be aware of.

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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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