Why Aena S.M.E., S.A. (BME:AENA) Could Be Worth Watching
Today we're going to take a look at the well-established Aena S.M.E., S.A. (BME:AENA). The company's stock saw a significant share price rise of over 20% in the past couple of months on the BME. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Aena S.M.E’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Aena S.M.E
What's the opportunity in Aena S.M.E?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.98% above my intrinsic value, which means if you buy Aena S.M.E today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth €110.31, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Aena S.M.E’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Aena S.M.E 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 negative profit growth of -14% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Aena S.M.E. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? AENA seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial 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 AENA for a while, now may not be the most advantageous 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 gel your views on AENA should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Aena S.M.E. You can find everything you need to know about Aena S.M.E in the latest infographic research report. If you are no longer interested in Aena S.M.E, 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.
