Keen Ocean International Holding Limited (HKG:8070) shareholders won't be pleased to see that the share price has had a very rough month, dropping 31% and undoing the prior period's positive performance. The last month has meant the stock is now only up 3.5% during the last year.
Although its price has dipped substantially, given about half the companies in Hong Kong have price-to-earnings ratios (or "P/E's") above 10x, you may still consider Keen Ocean International Holding as a highly attractive investment with its 2.4x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
For example, consider that Keen Ocean International Holding's financial performance has been pretty ordinary lately as earnings growth is non-existent. It might be that many expect the uninspiring earnings performance to worsen, which has repressed the P/E. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Keen Ocean International Holding's earnings, revenue and cash flow.
What Are Growth Metrics Telling Us About The Low P/E?
In order to justify its P/E ratio, Keen Ocean International Holding would need to produce anemic growth that's substantially trailing the market.
Retrospectively, the last year delivered virtually the same number to the company's bottom line as the year before. Still, the latest three year period has seen an excellent 1,329% overall rise in EPS, in spite of its uninspiring short-term performance. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth.
Comparing that to the market, which is only predicted to deliver 20% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised earnings results.
In light of this, it's peculiar that Keen Ocean International Holding's P/E sits below the majority of other companies. Apparently some shareholders believe the recent performance has exceeded its limits and have been accepting significantly lower selling prices.
The Bottom Line On Keen Ocean International Holding's P/E
Keen Ocean International Holding's P/E looks about as weak as its stock price lately. Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
We've established that Keen Ocean International Holding currently trades on a much lower than expected P/E since its recent three-year growth is higher than the wider market forecast. When we see strong earnings with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. It appears many are indeed anticipating earnings instability, because the persistence of these recent medium-term conditions would normally provide a boost to the share price.
Having said that, be aware Keen Ocean International Holding is showing 3 warning signs in our investment analysis, and 1 of those is concerning.
If these risks are making you reconsider your opinion on Keen Ocean International Holding, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
Keen Ocean International Holding Limited(HKG: 8070)股東不會很高興看到股價經歷了一個非常艱難的月份,下跌了31%,抵消了前一時期的積極表現。上個月意味着該股在去年僅上漲了3.5%。
儘管其價格已大幅下跌,但鑑於香港約有一半公司的市盈率(或 “市盈率”)超過10倍,您仍然可以將Keen Ocean International Holding的市盈率視爲具有2.4倍市盈率的極具吸引力的投資。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅下降是否有合理的基礎。
例如,假設Keen Ocean International Holding最近的財務表現相當普通,因爲收益不增長。可能是許多人預計平淡無奇的收益表現會惡化,這抑制了市盈率。如果你喜歡這家公司,你會希望情況並非如此,這樣你就有可能在股票失寵的時候買入一些股票。
我們沒有分析師的預測,但你可以查看我們關於Keen Ocean International Holding的收益、收入和現金流的免費報告,了解最近的趨勢如何爲公司的未來做好準備。
關於低市盈率,增長指標告訴我們什麼?
爲了證明其市盈率是合理的,Keen Ocean International Holding需要實現大幅落後於市場的疲軟增長。
有鑑於此,奇怪的是,Keen Ocean International Holding的市盈率低於大多數其他公司。顯然,一些股東認爲最近的表現已經超過了極限,並且一直在接受大幅降低的銷售價格。
Keen Ocean International Holding市盈率的底線
最近,Keen Ocean International Holding的市盈率看起來與其股價一樣疲軟。通常,我們的傾向是將市盈率的使用限制在確定市場對公司整體健康狀況的看法上。
我們已經確定,Keen Ocean International Holding目前的市盈率遠低於預期,因爲其最近三年的增長高於更廣泛的市場預期。當我們看到強勁的收益和快於市場的增長速度時,我們假設潛在風險可能會給市盈率帶來巨大壓力。看來許多人確實在預期收益不穩定,因爲近期這些中期狀況的持續下去通常會提振股價。
話雖如此,請注意,Keen Ocean International Holding在我們的投資分析中顯示了3個警告信號,其中一個令人擔憂。
如果這些風險讓你重新考慮對Keen Ocean International Holding的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。