Klingelnberg AG (VTX:KLIN), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF18.45 at one point, and dropping to the lows of CHF15.20. 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 Klingelnberg's current trading price of CHF16.40 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 Klingelnberg’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Klingelnberg

What Is Klingelnberg Worth?

Great news for investors – Klingelnberg is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’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 6.7x is currently well-below the industry average of 15.95x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because Klingelnberg’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Klingelnberg look like?

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. Though in the case of Klingelnberg, it is expected to deliver a negative earnings growth of -14%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although KLIN is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to KLIN, or whether diversifying into another stock may be a better move for your total risk and return.