Yahoo Finance What Does IG Group Holdings plc’s (LON:IGG) Share Price Indicate?
IG Group Holdings plc (LON:IGG), a capital markets company based in United Kingdom, saw a decent share price growth in the teens level on the LSE over the last few months. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine IG Group Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for IG Group Holdings
What is IG Group Holdings worth?
According to my valuation model, the stock is currently overvalued by about 27.5%, trading at UK£8.70 compared to my intrinsic value of £6.82. This means that the opportunity to buy IG Group Holdings at a good price has disappeared! In addition to this, it seems like IG Group Holdings’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will IG Group Holdings generate?
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 grow by a double-digit 12.63% over the next couple of years, the outlook is positive for IG Group Holdings. 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? It seems like the market has well and truly priced in IGG’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe IGG 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 tabs on IGG for some time, 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 IGG, 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 IG Group Holdings. You can find everything you need to know about IG Group Holdings in the latest infographic research report. If you are no longer interested in IG Group Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
