Is There Now An Opportunity In China Merchants Port Holdings Company Limited (HKG:144)?

China Merchants Port Holdings Company Limited (HKG:144), might not be a large cap stock, but it saw a significant share price rise of 22% in the past couple of months on the SEHK. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine China Merchants Port Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for China Merchants Port Holdings

What's The Opportunity In China Merchants Port Holdings?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 11.68% above our intrinsic value, which means if you buy China Merchants Port Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth HK$12.21, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, China Merchants Port Holdings’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from China Merchants Port Holdings?

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. 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 China Merchants Port Holdings, it is expected to deliver a relatively unexciting earnings growth of 3.0%, 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 144’s future outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 144, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for China Merchants Port Holdings you should be aware of.

If you are no longer interested in China Merchants Port Holdings, 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.