Let's talk about the popular Invesco Ltd (NYSE:IVZ). The company's shares saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $36.53 and falling to the lows of $31.75. 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 IVZ's current trading price of $31.75 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 IVZ’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 IVZ
What's the opportunity in IVZ?
According to my valuation model, IVZ seems to be fairly priced at around 18% below my intrinsic value, which means if you buy IVZ today, you’d be paying a fair price for it. And if you believe that IVZ is really worth $37.35, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that IVZ’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will IVZ 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 IVZ future expectations. IVZ’s earnings over the next few years are expected to increase by 27.47%, 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? It seems like the market has already priced in IVZ’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at IVZ? 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 an eye on IVZ, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for IVZ, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Invesco. You can find everything you need to know about IVZ in the latest infographic research report. If you are no longer interested in Invesco, 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.