Dynacor Gold Mines Inc ( TSX:DNG ), a metals and mining company based in Canada, received a lot of attention from a substantial price movement on the TSX over the last few months, increasing to CA$2.01 at one point, and dropping to the lows of CA$1.8. 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 Dynacor Gold Mines’s current trading price of CA$1.82 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 Dynacor Gold Mines’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Dynacor Gold Mines
What’s the opportunity in Dynacor Gold Mines?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.48% below my intrinsic value, which means if you buy Dynacor Gold Mines today, you’d be paying a fair price for it. And if you believe that the stock is really worth CA$2.26 , then there’s not much of an upside to gain from mispricing. Furthermore, it seems like Dynacor Gold Mines’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 the stock is less volatile than the wider market given its low beta.
Can we expect growth from Dynacor Gold Mines?
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. With profit expected to grow by 63.42% over the next year, the near-term future seems bright for Dynacor Gold Mines. 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? DNG’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 financial strength of the company. 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 an eye on DNG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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 Dynacor Gold Mines. You can find everything you need to know about Dynacor Gold Mines in the latest infographic research report . If you are no longer interested in Dynacor Gold Mines, 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.