News Corporation (NASDAQ:NWSA), a media company based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $16.59 at one point, and dropping to the lows of $15.03. 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 News’s current trading price of $15.44 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at News’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 News
What’s the opportunity in News?Great news for investors – News is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $21.54, but it is currently trading at US$15.44 on the share market, meaning that there is still an opportunity to buy now. However, given that News’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.
Can we expect growth from News?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. In the upcoming year, News’s earnings are expected to increase by 96.04%, 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 NWSA is currently undervalued, it may be a great time to increase 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on NWSA 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 NWSA. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on News. You can find everything you need to know about News in the latest infographic research report. If you are no longer interested in News, you can use our free platform to see my list of over 50 other stocks with a high growth potential.