Let’s talk about the popular Newmont Mining Corporation (NYSE:NEM). The company’s shares saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $41.94 and falling to the lows of $37.3. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Newmont Mining’s current trading price of $39.19 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Newmont Mining’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Newmont Mining
What is Newmont Mining worth?The stock is currently trading at US$39.19 on the share market, which means it is overvalued by 20% compared to my intrinsic value of $32.66. This means that the opportunity to buy Newmont Mining at a good price has disappeared! Another thing to keep in mind is that Newmont Mining’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of Newmont Mining 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. With profit expected to more than double over the next couple of years, the future seems bright for Newmont Mining. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? NEM’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe NEM 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 an eye on NEM for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for NEM, 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 Newmont Mining. You can find everything you need to know about Newmont Mining in the latest infographic research report. If you are no longer interested in Newmont Mining, you can use our free platform to see my list of over 50 other stocks with a high growth potential.