Yahoo Finance Is It The Right Time To Buy Lundin Mining Corporation (TSE:LUN)?
Lundin Mining Corporation (TSX:LUN), a metals and mining company based in Canada, saw significant share price volatility over the past couple of months on the TSX, rising to the highs of CA$9.06 and falling to the lows of CA$7.96. 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 Lundin Mining’s current trading price of CA$8.59 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 Lundin Mining’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 Lundin Mining
What is Lundin Mining worth?
The stock is currently trading at CA$8.59 on the share market, which means it is overvalued by 45% compared to my intrinsic value of CA$5.94. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Lundin Mining’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 Lundin Mining 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. 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. Lundin Mining’s earnings over the next few years are expected to increase by 31.11%, 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? LUN’s optimistic 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 LUN 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 an eye on LUN for a while, 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 optimistic prospect is encouraging for LUN, 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 Lundin Mining. You can find everything you need to know about Lundin Mining in the latest infographic research report. If you are no longer interested in Lundin Mining, 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.
