SIMPAR S.A.

SIMH3
End-of-day quote. End-of-day quote  - 11/30
10.53BRL -1.96%

SIMPAR S.A. : A good level to buy

11/25/2021 | 02:17am
Nicolas Aleksy
Contributor / Partner

Strategy published on : 11/25/2021 | 02:17

long trade
Live

Entry price : 10.95BRL
Target : 17.4BRL
Stop-loss : 9.1BRL
Potential : 58.9%

The recent downturn has taken SIMPAR S.A. shares close to a medium term support level around 10.25 BRL. The timing for a long trade in the stock appears good.
Investors have an opportunity to buy the stock and target the BRL 17.4.

Summary

● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.


Strengths

● According to sales estimates from analysts polled by Standard & Poor's, the company is among the best with regard to growth.

● The company's earnings per share (EPS) are expected to grow significantly over the next few years according to the consensus of analysts covering the stock.

● Before interest, taxes, depreciation and amortization, the company's margins are particularly high.

● With a P/E ratio at 12.41 for the current year and 10.23 for next year, earnings multiples are highly attractive compared with competitors.

● The company has a low valuation given the cash flows generated by its activity.

● Over the past year, analysts have regularly revised upwards their sales forecast for the company.

● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.

● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.

● Analysts covering this company mostly recommend stock overweighting or purchase.

● The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.

● Over the past four months, analysts' average price target has been revised upwards significantly.


Weaknesses

● The company is in a hindered financial situation with significant debt and rather low EBITDA levels.

● The price targets of analysts who cover the stock differ significantly. This implies difficulties in evaluating the company and its business.

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