Profit ratio

At HK$53.00, is it time to put CK Hutchison Holdings Limited (HKG:1) on your watch list?

CK Hutchison Holdings Limited (HKG:1) has seen significant share price moves in recent months on the SEHK, reaching highs of HK$58.75 and falling to lows of HK$52.45 . Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. A question to answer is does CK Hutchison Holdings current trading price of HK$53.00 reflect the true value of the large cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of CK Hutchison Holdings based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for CK Hutchison Holdings

What is CK Hutchison Holdings worth?

According to my multiple price model, which compares the company’s price-earnings ratio to the industry average, the stock price seems justified. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find that CK Hutchison Holdings’ ratio of 6.07x is trading slightly above its industry peers’ ratio of 5.64x, which means that if you buy CK Hutchison Holdings today you will pay a relatively reasonable price. And if you think CK Hutchison Holdings should be trading within this range, then there really isn’t room for the stock price to rise above the levels of other industry peers over the long term. Is there another opportunity to buy low in the future? Since CK Hutchison Holdings’ stock price is quite volatile, we could potentially see it fall (or rise) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What type of growth will CK Hutchison Holdings generate?

SEHK: 1 Profit and Revenue Growth June 15, 2022

Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with relatively moderate earnings growth of 8.6% expected over the next two years, growth does not appear to be a key driver for a buy decision for CK Hutchison Holdings, at least in the short term.

What does this mean to you :

Are you a shareholder? It looks like the market has already priced in the growth outlook of 1, with stocks trading around price multiples of the sector. However, there are also other important factors that we haven’t considered today, such as the background of its management team. Have these factors changed since the last time you watched 1? Will you be confident enough to invest in the company if the price drops below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on 1, it might not be the best time to buy, given that it’s trading around industry price multiples. However, the positive growth outlook may mean that it is worth digging deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it is equally important to consider the risks CK Hutchison Holdings currently faces. You would be interested to know that we have found 2 warning signs for CK Hutchison Holdings and you will want to know them.

If you are no longer interested in CK Hutchison Holdings, you can use our free platform to view our list of over 50 other stocks with high growth potential.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.