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At $23.13, Is It Time To Buy Newcrest Mining Limited (ASX:NCM)?

Newcrest Mining Limited (ASX:NCM) saw significant share price volatility over the past couple of months on the ASX, rising to the highs of A$24.06 and falling to the lows of A$21.53. 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 Newcrest Mining’s current trading price of A$23.13 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 Newcrest 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 Newcrest Mining

What’s the opportunity in Newcrest Mining?

According to my valuation model, the stock is currently overvalued by about 52%, trading at A$23.13 compared to my intrinsic value of A$15.26. This means that the buying opportunity has probably disappeared for now. Furthermore, Newcrest Mining’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Newcrest Mining generate?

ASX:NCM Future Profit Jan 9th 18
ASX:NCM Future Profit Jan 9th 18

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. Newcrest Mining’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Newcrest Mining’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe Newcrest Mining 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 Newcrest Mining 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 Newcrest Mining, 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 Newcrest Mining. You can find everything you need to know about Newcrest Mining in the latest infographic research report. If you are no longer interested in Newcrest 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.

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