Should You Think About Buying Hutchison Port Holdings Trust (SGX:NS8U) Now?

While Hutchison Port Holdings Trust (SGX:NS8U) might not be the most widely known stock at the moment, it maintained its current share price over the past couple of month on the SGX, with a relatively tight range of US$0.23 to US$0.24. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hutchison Port Holdings Trust’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Hutchison Port Holdings Trust

Is Hutchison Port Holdings Trust Still Cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 9.28x is currently trading slightly below its industry peers’ ratio of 13.22x, which means if you buy Hutchison Port Holdings Trust today, you’d be paying a decent price for it. And if you believe that Hutchison Port Holdings Trust 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. Furthermore, it seems like Hutchison Port Holdings Trust’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s priced similarly to industry peers. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Hutchison Port Holdings Trust generate?

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. 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. Though in the case of Hutchison Port Holdings Trust, 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, NS8U appears to be trading around industry price multiples, 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 optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on NS8U, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on NS8U for a while, now may not be the most optimal time to buy, given it is trading around industry price multiples. This 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 crystallize your views on NS8U should the price fluctuate below the industry PE ratio.

If you want to dive deeper into Hutchison Port Holdings Trust, you'd also look into what risks it is currently facing. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Hutchison Port Holdings Trust.

If you are no longer interested in Hutchison Port Holdings Trust, 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.