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OCI N.V. (AMS:OCI), is not the largest company out there, but it received a lot of attention from a substantial price movement on the ENXTAM over the last few months, increasing to €31.26 at one point, and dropping to the lows of €20.53. 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 OCI's current trading price of €22.04 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at OCI’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for OCI
Is OCI Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8.32% above my intrinsic value, which means if you buy OCI today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €20.35, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, OCI’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from OCI?
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. Though in the case of OCI, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Currently, OCI appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on OCI for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on OCI should the price fluctuate below its true value.