Yahoo Finance Is Goldcorp Inc (TSE:G) Undervalued?
Today we’re going to take a look at the well-established Goldcorp Inc (TSX:G). The company’s stock saw a double-digit share price rise of over 10% in the past couple of months on the TSX. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Goldcorp’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Goldcorp
What’s the opportunity in Goldcorp?
The stock is currently trading at CA$18.33 on the share market, which means it is overvalued by 85% compared to my intrinsic value of CA$9.92. This means that the opportunity to buy Goldcorp at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Goldcorp’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Goldcorp 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. Though in the case of Goldcorp, it is expected to deliver a relatively unexciting earnings growth of 9.59%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? G’s 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 G 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 G 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 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 Goldcorp. You can find everything you need to know about Goldcorp in the latest infographic research report. If you are no longer interested in Goldcorp, 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.
