INFICON Holding AG (VTX:IFCN), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the SWX over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine INFICON Holding’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for INFICON Holding
Is INFICON Holding Still Cheap?
According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that INFICON Holding’s ratio of 35.11x is trading in-line with its industry peers’ ratio, which means if you buy INFICON Holding today, you’d be paying a relatively sensible price for it. Is there another opportunity to buy low in the future? Since INFICON Holding’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of INFICON Holding look like?
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. INFICON Holding's earnings over the next few years are expected to increase by 24%, 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? IFCN’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. 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 IFCN? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on IFCN, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for IFCN, 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.