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Byggmax Group AB (publ) (OM:BMAX), a specialty retail company based in Sweden, saw a significant share price rise of over 20% in the past couple of months on the OM. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Byggmax Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Byggmax Group
Is Byggmax Group still cheap?
Great news for investors – Byggmax Group is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is SEK73.57, but it is currently trading at KR46.00 on the share market, meaning that there is still an opportunity to buy now. Byggmax Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Byggmax Group?
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. With profit expected to grow by 50.99% over the next couple of years, the future seems bright for Byggmax Group. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since BMAX is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on BMAX for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BMAX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.