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Global Ports Investments Plc (LON:GLPR), is not the largest company out there, but it saw its share price hover around a small range of US$0.64 to US$0.64 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Global Ports Investments’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Global Ports Investments
Is Global Ports Investments still cheap?
Great news for investors – Global Ports Investments is still trading at a fairly cheap price 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 Global Ports Investments’s ratio of 0.86x is below its peer average of 12.16x, which indicates the stock is trading at a lower price compared to the Infrastructure industry. However, given that Global Ports Investments’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Global Ports Investments?
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. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Global Ports Investments, at least in the near future.
What this means for you:
Are you a shareholder? Although GLPR is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to GLPR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on GLPR for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.