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Brave Bison Group plc (LON:BBSN), might not be a large cap stock, but it led the AIM gainers with a relatively large price hike in the past couple of weeks. While good news for shareholders, the company has traded much higher in the past year. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Brave Bison Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What Is Brave Bison Group Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 15% below our intrinsic value, which means if you buy Brave Bison Group today, you’d be paying a fair price for it. And if you believe that the stock is really worth £0.03, then there’s not much of an upside to gain from mispricing. In addition to this, Brave Bison Group has a low beta, which suggests its share price is less volatile than the wider market.
See our latest analysis for Brave Bison Group
Can we expect growth from Brave Bison Group?
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. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Brave Bison Group, at least in the near future.
What This Means For You
Are you a shareholder? Currently, BBSN 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 optimal 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 BBSN for a while, now may not be the most optimal 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 BBSN should the price fluctuate below its true value.