Hecla Mining Company (NYSE:HL), a metals and mining company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $4.49 at one point, and dropping to the lows of $3.46. 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 Hecla Mining’s current trading price of $3.75 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hecla Mining’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 Hecla Mining
Is Hecla Mining still cheap?
Hecla Mining appears to be overvalued by 63% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$3.75 on the market compared to my intrinsic value of $2.3. This means that the opportunity to buy Hecla Mining at a good price has disappeared! Furthermore, Hecla Mining’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Hecla Mining?
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 the company’s future expectations. With profit expected to grow by 33.53% over the next year, the near-term future seems bright for Hecla Mining. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? HL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe HL should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on HL for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for HL, which means it’s worth diving deeper into other factors 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 Hecla Mining. You can find everything you need to know about Hecla Mining in the latest infographic research report. If you are no longer interested in Hecla Mining, 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.