Should You Investigate Hamburger Hafen und Logistik Aktiengesellschaft (ETR:HHFA) At €12.74?

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 small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Hamburger Hafen und Logistik’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Hamburger Hafen und Logistik

What Is Hamburger Hafen und Logistik Worth?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. 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 10.34x is trading slightly below its industry peers’ ratio of 14.37x, which means if you buy Hamburger Hafen und Logistik today, you’d be paying a reasonable price for it. And if you believe that Hamburger Hafen und Logistik should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. Is there another opportunity to buy low in the future? Since Hamburger Hafen und Logistik’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What does the future of Hamburger Hafen und Logistik look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Hamburger Hafen und Logistik, it is expected to deliver a relatively unexciting earnings growth of 2.2%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in HHFA’s growth outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at HHFA? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on HHFA, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Hamburger Hafen und Logistik, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Hamburger Hafen und Logistik, and understanding it should be part of your investment process.

If you are no longer interested in Hamburger Hafen und Logistik, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.