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u-blox Holding AG (VTX:UBXN), which is in the semiconductor business, and is based in Switzerland, received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF97.25 at one point, and dropping to the lows of CHF70.9. 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 u-blox Holding's current trading price of CHF72.15 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 u-blox Holding’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 u-blox Holding
Is u-blox Holding still cheap?
Great news for investors – u-blox Holding is still trading at a fairly cheap price. 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 u-blox Holding’s ratio of 12.93x is below its peer average of 21.99x, which suggests the stock is undervalued compared to the Semiconductor industry. What’s more interesting is that, u-blox Holding’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from u-blox Holding?
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 u-blox Holding, it is expected to deliver a negative earnings growth of -15%, 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? Although UBXN is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to UBXN, or whether diversifying into another stock may be a better move for your total risk and return.