SRV Yhtiöt Oyj (HEL:SRV1V), which is in the construction business, and is based in Finland, received a lot of attention from a substantial price movement on the HLSE over the last few months, increasing to €1.53 at one point, and dropping to the lows of €1.28. 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 SRV Yhtiöt Oyj's current trading price of €1.28 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 SRV Yhtiöt Oyj’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 SRV Yhtiöt Oyj

What's the opportunity in SRV Yhtiöt Oyj?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.82% above my intrinsic value, which means if you buy SRV Yhtiöt Oyj today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €1.22, there’s only an insignificant downside when the price falls to its real value. In addition to this, SRV Yhtiöt Oyj has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from SRV Yhtiöt Oyj?

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. 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. SRV Yhtiöt Oyj’s earnings over the next few years are expected to increase by 80%, 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? It seems like the market has already priced in SRV1V’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on SRV1V, now may not be the most advantageous 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.