When should you buy COSCO SHIPPING Holdings Co., Ltd. (HKG:1919)?

Today we are going to take a look at the well-established COSCO SHIPPING Holdings Co., Ltd. (HKG:1919). The company’s shares have seen a significant rise in share price of more than 20% over the past two months on the SEHK. With many analysts covering large-cap stocks, we can expect any price-sensitive announcements to have already factored into the stock price. However, what if the stock is still a bargain? Let’s take a closer look at COSCO SHIPPING Holdings’ valuation and outlook to determine if there is still a bargain opportunity.

See our latest analysis for COSCO SHIPPING Holdings

Is COSCO SHIPPING Holdings always cheap?

Good news, investors! COSCO SHIPPING Holdings is still a good deal right now according to my multiple price model, which compares the company’s price-to-earnings ratio to the industry average. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find COSCO SHIPPING Holdings’ ratio of 2.74x to be below its average of 10.17x, indicating that the stock is trading at a lower price than the shipping industry. What is more interesting is that the stock price of COSCO SHIPPING Holdings is quite volatile, which gives us more chances to buy since the stock price could go down (or up) at the to come up. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

Can we expect growth from COSCO SHIPPING Holdings?

SEHK: 1919 Earnings and Revenue Growth February 20, 2022

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Although in the case of COSCO SHIPPING Holdings, it is expected to post very negative earnings growth over the next few years, which does not help bolster its investment thesis. It seems that the risk of future uncertainty is high, at least in the short term.

What does this mean to you :

Are you a shareholder? Although 1919 is currently trading below the industry PE ratio, the negative profit outlook brings with it some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to 1919, or whether diversifying into another security might be a better decision for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on 1919 for a while, but are hesitant to take the plunge, I recommend doing some more in-depth research on the stock. Given its current price multiple, now is the perfect time to make a decision. But keep in mind the risks that come with a negative growth outlook going forward.

Keep in mind that when it comes to analyzing a stock, the risks involved should be noted. Example: we have identified 2 warning signs for COSCO SHIPPING Holdings you must be aware and one of them cannot be ignored.

If you are no longer interested in COSCO SHIPPING Holdings, you can use our free platform to view our list of over 50 other stocks with high growth potential.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.