Is Now An Opportune Moment To Examine The Howard Hughes Corporation (NYSE:HHC)?

The Howard Hughes Corporation (NYSE:HHC), which is in the real estate business, and is based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. As a US$2.5b market-cap stock, it seems odd Howard Hughes is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today I will analyse the most recent data on Howard Hughes’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Howard Hughes

What's the opportunity in Howard Hughes?

According to my valuation model, Howard Hughes seems to be fairly priced at around 18% below my intrinsic value, which means if you buy Howard Hughes today, you’d be paying a fair price for it. And if you believe that the stock is really worth $68.22, then there isn’t much 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 Howard Hughes’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.

What kind of growth will Howard Hughes generate?

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 41% over the next couple of years, the future seems bright for Howard Hughes. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? HHC’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 tabs on HHC, 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 the company, which means it’s worth further examining 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 Howard Hughes. You can find everything you need to know about Howard Hughes in the latest infographic research report. If you are no longer interested in Howard Hughes, 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.

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