Is There Now An Opportunity In Ternium SA (TX)?
Ternium SA (NYSE:TX), a materials company based in Argentina, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on TX’s outlook and valuation to see if the opportunity still exists. See our latest analysis for TX
Is TX still cheap?
Good news, investors! TX is still a bargain right now. According to my valuation, the intrinsic value for the stock is $42.23 which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that TX’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from TX?
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 TX future expectations. However, with a negative profit growth of -5.38% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for TX. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although TX is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to TX, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on TX for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Ternium S.A. You can find everything you need to know about TX in the latest infographic research report. If you are no longer interested in Ternium S.A, 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.
