Yahoo Finance Should You Buy Randgold Resources Limited (LON:RRS) At £59.86?
Randgold Resources Limited (LSE:RRS), a metals and mining company based in Jersey, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of £55.72 to £61.08. However, is this the true valuation level of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Randgold Resources’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 Randgold Resources
Is Randgold Resources still cheap?
According to my valuation model, the stock is currently overvalued by about 23%, trading at UK£59.86 compared to my intrinsic value of £48.6. Not the best news for investors looking to buy! In addition to this, it seems like Randgold Resources’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.
Can we expect growth from Randgold Resources?
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. With profit expected to grow by a double-digit 15.99% over the next couple of years, the outlook is positive for Randgold Resources. 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 RRS’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 RRS 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 RRS 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 RRS, 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 Randgold Resources. You can find everything you need to know about Randgold Resources in the latest infographic research report. If you are no longer interested in Randgold Resources, 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.
