Today we’re going to take a look at the well-established Vulcan Materials Company (NYSE:VMC). The company’s stock had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of US$136 to US$148. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Vulcan Materials’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in Vulcan Materials?
Great news for investors – Vulcan Materials is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $191.30, but it is currently trading at US$147 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Vulcan Materials’s share price may be 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 kind of growth will Vulcan Materials generate?
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. Vulcan Materials’s earnings over the next few years are expected to increase by 62%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since VMC is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on VMC for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy VMC. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Vulcan Materials. You can find everything you need to know about Vulcan Materials in the latest infographic research report. If you are no longer interested in Vulcan Materials, 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 firstname.lastname@example.org. 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.
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