Is There Now An Opportunity In Hillgrove Resources Limited (ASX:HGO)?
Hillgrove Resources Limited (ASX:HGO), a materials company based in Australia, saw a double-digit share price rise of over 10% in the past couple of months on the ASX. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine HGO’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for Hillgrove Resources
What's the opportunity in HGO?
Great news for investors – HGO is still trading at a fairly cheap price. My valuation model shows that the stock’s value should be $1.67 but it is currently trading at $0.08 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, HGO’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because HGO’s stock is less volatile than the wider market given its low beta.
What does the future of HGO look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares.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 HGO future expectations. HGO’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since HGO is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on HGO for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HGO. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Hillgrove Resources. You can find everything you need to know about HGO in the latest infographic research report. If you are no longer interested in Hillgrove 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.
