Is It Too Late To Buy General Dynamics Corporation (GD)?
Today we're going to take a look at the well-established General Dynamics Corporation (NYSE:GD). The company's stock had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of $193.84 to $204.93. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at GD’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for General Dynamics
Is GD still cheap?
According to my valuation model, GD seems to be fairly priced at around 6% above my intrinsic value, which means if you buy GD today, you’d be paying a relatively reasonable price for it. And if you believe that GD is really worth $185.87, there’s only an insignificant downside when the price falls to its real value. Furthermore, it seems like GD’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because GD’s stock is less volatile than the wider market given its low beta.
What kind of growth will GD generate?
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 GD future expectations. Though in the case of GD, it is expected to deliver a relatively unexciting earnings growth of 8.91%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for GD, at least in the near term.
What this means for you:
Are you a shareholder? GD’s optimistic 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 GD? 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 an eye on GD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for GD, which 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 General Dynamics. You can find everything you need to know about GD in the latest infographic research report. If you are no longer interested in General Dynamics, 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.
