Dottikon Es Holding AG (VTX:DESN), is not the largest company out there, but it led the SWX gainers with a relatively large price hike in the past couple of weeks. As a CHF3.6b market-cap stock, it seems odd Dottikon Es Holding is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today I will analyse the most recent data on Dottikon Es Holding’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Dottikon Es Holding
What's The Opportunity In Dottikon Es Holding?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19% below my intrinsic value, which means if you buy Dottikon Es Holding today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CHF318.70, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Dottikon Es Holding’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Dottikon Es Holding look like?
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. In Dottikon Es Holding's case, its revenues over the next few years are expected to grow by 33%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger 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 DESN’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 DESN, now may not be the most optimal 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.