Is There Now An Opportunity In Athens Water Supply and Sewerage Company S.A. (ATH:EYDAP)?
Athens Water Supply and Sewerage Company S.A. (ATH:EYDAP), which is in the water utilities business, and is based in Greece, saw significant share price movement during recent months on the ATSE, rising to highs of €6.13 and falling to the lows of €5.36. 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 Athens Water Supply and Sewerage's current trading price of €5.83 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 Athens Water Supply and Sewerage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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See our latest analysis for Athens Water Supply and Sewerage
Is Athens Water Supply and Sewerage still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.96x is currently trading slightly below its industry peers’ ratio of 13.53x, which means if you buy Athens Water Supply and Sewerage today, you’d be paying a reasonable price for it. And if you believe that Athens Water Supply and Sewerage should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Athens Water Supply and Sewerage’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 does the future of Athens Water Supply and Sewerage 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. 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. Though in the case of Athens Water Supply and Sewerage, it is expected to deliver a relatively unexciting top-line growth of 9.6% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in EYDAP’s growth outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at EYDAP? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on EYDAP, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Athens Water Supply and Sewerage. You can find everything you need to know about Athens Water Supply and Sewerage in the latest infographic research report. If you are no longer interested in Athens Water Supply and Sewerage, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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.
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. Thank you for reading.
