Should You Think About Buying Huntington Ingalls Industries, Inc. (NYSE:HII) Now?
Let's talk about the popular Huntington Ingalls Industries, Inc. (NYSE:HII). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$279 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 Huntington Ingalls Industries's current trading price of US$238 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 Huntington Ingalls Industries’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Huntington Ingalls Industries
What's the opportunity in Huntington Ingalls Industries?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7.51% above my intrinsic value, which means if you buy Huntington Ingalls Industries today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $220.91, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Huntington Ingalls Industries’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Huntington Ingalls Industries?
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 the company's future expectations. Though in the case of Huntington Ingalls Industries, it is expected to deliver a relatively unexciting earnings growth of 7.0%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? HII’s 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 conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on HII, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into 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 Huntington Ingalls Industries. You can find everything you need to know about Huntington Ingalls Industries in the latest infographic research report. If you are no longer interested in Huntington Ingalls Industries, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
