11-02-2019 Brunel International N.V. (AMS:BRNL), which is in the professional services business, and is based in Netherlands, saw a double-digit share price rise of over 10% in the past couple of months on the ENXTAM. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Brunel International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Brunel International
What is Brunel International worth?
According to my relative valuation model, the stock is currently overvalued. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Brunel International’s ratio of 50.71x is above its peer average of 17.77x, which suggests the stock is overvalued compared to the Professional Services industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Brunel International’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Brunel International look like?
ENXTAM:BRNL Future Profit February 11th 19
ENXTAM:BRNL Future Profit February 11th 19
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Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to more than double over the next couple of years, the future seems bright for Brunel International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? BRNL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe BRNL 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. 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 tabs on BRNL for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for BRNL, which means 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 Brunel International. You can find everything you need to know about Brunel International in the latest infographic research report. If you are no longer interested in Brunel International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.