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While BE Semiconductor Industries N.V. (AMS:BESI) might not have the largest market cap around , it saw a decent share price growth of 12% on the ENXTAM over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine BE Semiconductor Industries’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for BE Semiconductor Industries
Is BE Semiconductor Industries Still Cheap?
According to our valuation model, BE Semiconductor Industries seems to be fairly priced at around 14% below our intrinsic value, which means if you buy BE Semiconductor Industries today, you’d be paying a fair price for it. And if you believe the company’s true value is €128.05, 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 BE Semiconductor Industries’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 kind of growth will BE Semiconductor Industries generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. BE Semiconductor Industries' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This 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 BESI’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 conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on BESI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.