Is Now The Time To Look At Buying Hamburger Hafen und Logistik Aktiengesellschaft (ETR:HHFA)?

Hamburger Hafen und Logistik Aktiengesellschaft (ETR:HHFA), might not be a large cap stock, but it saw a decent share price growth in the teens level on the XTRA over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Hamburger Hafen und Logistik’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Hamburger Hafen und Logistik

What's the opportunity in Hamburger Hafen und Logistik?

According to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Hamburger Hafen und Logistik’s ratio of 25.07x is above its peer average of 16.82x, which suggests the stock is trading at a higher price compared to the Infrastructure industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Hamburger Hafen und Logistik’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Hamburger Hafen und Logistik?

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. Hamburger Hafen und Logistik's earnings over the next few years are expected to increase by 47%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in HHFA’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe HHFA should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 tabs on HHFA for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for HHFA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Hamburger Hafen und Logistik has 4 warning signs and it would be unwise to ignore these.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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