At HK$8.10, Is COSCO SHIPPING Holdings Co., Ltd. (HKG:1919) Worth Looking At Closely?

Let's talk about the popular COSCO SHIPPING Holdings Co., Ltd. (HKG:1919). The company's shares received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$9.88 at one point, and dropping to the lows of HK$7.78. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether COSCO SHIPPING Holdings' current trading price of HK$8.10 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at COSCO SHIPPING Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for COSCO SHIPPING Holdings

What Is COSCO SHIPPING Holdings Worth?

According to my valuation model, COSCO SHIPPING Holdings seems to be fairly priced at around 10.07% above my intrinsic value, which means if you buy COSCO SHIPPING Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is HK$7.36, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since COSCO SHIPPING Holdings’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 COSCO SHIPPING Holdings 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 COSCO SHIPPING Holdings, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Currently, 1919 appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on 1919 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on 1919 should the price fluctuate below its true value.

If you'd like to know more about COSCO SHIPPING Holdings as a business, it's important to be aware of any risks it's facing. For example, we've found that COSCO SHIPPING Holdings has 2 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

If you are no longer interested in COSCO SHIPPING 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.