Yahoo Finance Is There Now An Opportunity In Bankia, S.A. (BME:BKIA)?
Bankia, S.A. (BME:BKIA), operating in the financial services industry based in Spain, saw significant share price movement during recent months on the BME, rising to highs of €1.97 and falling to the lows of €0.90. 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 Bankia's current trading price of €0.98 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Bankia’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 Bankia
Is Bankia still cheap?
The stock is currently trading at €0.98 on the share market, which means it is overvalued by 45% compared to my intrinsic value of €0.67. This means that the opportunity to buy Bankia at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Bankia’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Bankia generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 a negative profit growth of -9.0% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Bankia. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? If you believe BKIA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on BKIA for a while, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Bankia. You can find everything you need to know about Bankia in the latest infographic research report. If you are no longer interested in Bankia, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
