The Howard Hughes Corporation (NYSE:HHC), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a US$3.2b market-cap stock, it seems odd Howard Hughes is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s take a look at Howard Hughes’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What is Howard Hughes worth?
Good news, investors! Howard Hughes is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $77.15, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Howard Hughes’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.
What does the future of Howard Hughes 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. In the upcoming year, Howard Hughes’s earnings are expected to increase by 44%, 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 HHC is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 HHC for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HHC. 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 buy.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Howard Hughes (of which 1 is potentially serious!) you should know about.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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