Consti Yhtiöt Oyj (HEL:CONSTI), which is in the construction business, and is based in Finland, received a lot of attention from a substantial price movement on the HLSE over the last few months, increasing to €5.56 at one point, and dropping to the lows of €4.88. 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 Consti Yhtiöt Oyj's current trading price of €5.20 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Consti Yhtiöt Oyj’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Consti Yhtiöt Oyj worth?
Great news for investors – Consti Yhtiöt Oyj is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is €8.33, but it is currently trading at €5.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Consti Yhtiöt Oyj’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Consti Yhtiöt Oyj look like?
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. 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 an expected decline of -1.7% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Consti Yhtiöt Oyj. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although CONSTI is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to CONSTI, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on CONSTI for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Consti Yhtiöt Oyj. You can find everything you need to know about Consti Yhtiöt Oyj in the latest infographic research report. If you are no longer interested in Consti Yhtiöt Oyj, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.