In This Article:
While Hamburger Hafen und Logistik Aktiengesellschaft (ETR:HHFA) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the XTRA over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Hamburger Hafen und Logistik’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Hamburger Hafen und Logistik
What Is Hamburger Hafen und Logistik Worth?
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. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Hamburger Hafen und Logistik’s ratio of 10.06x is trading slightly below its industry peers’ ratio of 14.37x, which means if you buy Hamburger Hafen und Logistik today, you’d be paying a decent price for it. And if you believe Hamburger Hafen und Logistik should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. So, is there another chance to buy low in the future? Given that Hamburger Hafen und Logistik’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 does the future of Hamburger Hafen und Logistik look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted profit growth of 2.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Hamburger Hafen und Logistik, at least in the short term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in HHFA’s growth outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at HHFA? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?