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Today we're going to take a look at the well-established Vulcan Materials Company (NYSE:VMC). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$292 at one point, and dropping to the lows of US$238. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Vulcan Materials' current trading price of US$252 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Vulcan Materials’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 Vulcan Materials
What Is Vulcan Materials Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 5.2% below our intrinsic value, which means if you buy Vulcan Materials today, you’d be paying a fair price for it. And if you believe that the stock is really worth $265.63, then there’s not much of an upside to gain from mispricing. In addition to this, Vulcan Materials has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will Vulcan Materials 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. Vulcan Materials' earnings over the next few years are expected to increase by 74%, 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? VMC’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on VMC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.