FORTEC Elektronik AG (ETR:FEV), is not the largest company out there, but it led the XTRA gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on FORTEC Elektronik’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for FORTEC Elektronik

What's The Opportunity In FORTEC Elektronik?

Good news, investors! FORTEC Elektronik is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €40.15, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. FORTEC Elektronik’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will FORTEC Elektronik 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. However, with a relatively muted profit growth of 6.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for FORTEC Elektronik, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since FEV is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FEV for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FEV. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you want to dive deeper into FORTEC Elektronik, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with FORTEC Elektronik, and understanding these should be part of your investment process.

If you are no longer interested in FORTEC Elektronik, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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