While Matson, Inc. (NYSE:MATX) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NYSE over the last few months. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the companyâs outlook is already priced into the stock. However, what if the stock is still a bargain? Letâs examine Matsonâs valuation and outlook in more detail to determine if thereâs still a bargain opportunity.
View our latest analysis for Matson
What's The Opportunity In Matson?
According to my valuation model, Matson seems to be fairly priced at around 17.52% above my intrinsic value, which means if you buy Matson today, youâd be paying a relatively reasonable price for it. And if you believe the companyâs true value is $57.89, thereâs only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Matsonâs 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.
Can we expect growth from Matson?
Future outlook is an important aspect when youâre looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that itâs 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 Matson, it is expected to deliver a highly negative earnings growth in the next few years, which doesnât 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? MATX seems fairly priced right now, 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 youâve been keeping an eye on MATX 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 thereâs 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 havenât considered today, which can help gel your views on MATX should the price fluctuate below its true value.
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. For example, we've found that Matson has 2 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.
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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.
About NYSE:MATX
Matson
Engages in the provision of ocean transportation and logistics services.
Adequate balance sheet average dividend payer.