Is It Time To Consider Buying Nippon Yusen Kabushiki Kaisha (TSE:9101)?

Let's talk about the popular Nippon Yusen Kabushiki Kaisha (TSE:9101). The company's shares led the TSE gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Nippon Yusen Kabushiki Kaisha’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Nippon Yusen Kabushiki Kaisha

Is Nippon Yusen Kabushiki Kaisha Still Cheap?

According to our valuation model, Nippon Yusen Kabushiki Kaisha seems to be fairly priced at around 1.4% below our intrinsic value, which means if you buy Nippon Yusen Kabushiki Kaisha today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ¥4940.64, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Nippon Yusen Kabushiki Kaisha’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Nippon Yusen Kabushiki Kaisha generate?

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 Nippon Yusen Kabushiki Kaisha, it is expected to deliver a negative earnings growth of -19%, 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? 9101 seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in 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 9101 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, 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 9101 should the price fluctuate below its true value.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 4 warning signs for Nippon Yusen Kabushiki Kaisha (1 is a bit unpleasant) you should be familiar with.

If you are no longer interested in Nippon Yusen Kabushiki Kaisha, 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.