Yahoo Finance When Should You Buy BOC Hong Kong (Holdings) Limited (HKG:2388)?
Let’s talk about the popular BOC Hong Kong (Holdings) Limited (HKG:2388). The company’s shares saw significant share price volatility over the past couple of months on the SEHK, rising to the highs of HK$41.15 and falling to the lows of HK$36.5. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether BOC Hong Kong (Holdings)’s current trading price of HK$38.7 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at BOC Hong Kong (Holdings)’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for BOC Hong Kong (Holdings)
What’s the opportunity in BOC Hong Kong (Holdings)?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.60% below my intrinsic value, which means if you buy BOC Hong Kong (Holdings) today, you’d be paying a fair price for it. And if you believe that the stock is really worth HK$38.93, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that BOC Hong Kong (Holdings)’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 BOC Hong Kong (Holdings) look like?
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. BOC Hong Kong (Holdings)’s earnings over the next few years are expected to increase by 44.35%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in 2388’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on 2388, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on BOC Hong Kong (Holdings). You can find everything you need to know about BOC Hong Kong (Holdings) in the latest infographic research report. If you are no longer interested in BOC Hong Kong (Holdings), you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
