Is It Time To Consider Buying Capital Clean Energy Carriers Corp. (NASDAQ:CCEC)?

Capital Clean Energy Carriers Corp. (NASDAQ:CCEC), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The recent jump in the share price has meant that the company is trading around its 52-week high. With many analysts covering the 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 examine Capital Clean Energy Carriers’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Capital Clean Energy Carriers

Is Capital Clean Energy Carriers Still Cheap?

Capital Clean Energy Carriers is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Capital Clean Energy Carriers’s ratio of 11.3x is above its peer average of 6.21x, which suggests the stock is trading at a higher price compared to the Shipping industry. Furthermore, Capital Clean Energy Carriers’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach levels around its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from Capital Clean Energy Carriers?

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. However, with a negative profit growth of -0.7% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Capital Clean Energy Carriers. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? If you believe CCEC is currently trading above its peers, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on CCEC for a while, now may not be the best time to enter into the stock. Its price has risen beyond its industry peers, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. When we did our research, we found 5 warning signs for Capital Clean Energy Carriers (3 make us uncomfortable!) that we believe deserve your full attention.

If you are no longer interested in Capital Clean Energy Carriers, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.