Seanergy Maritime Holdings Corp (NASDAQ:SHIP), a marine company based in Greece, saw a significant share price rise of over 20% in the past couple of months on the NasdaqCM. Less covered, small-stocks like SHIP sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could SHIP still be trading at a low price relative to its actual value? Let’s examine SHIP’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. View our latest analysis for Seanergy Maritime Holdings
What's the opportunity in SHIP?
According to my relative valuation model, SHIP seems to be currently fairly priced. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that SHIP’s ratio of 1.8x is trading slightly above its industry peers’ ratio of 0.7x, which means if you buy SHIP today, you’d be paying a relatively fair price for it. And if you believe that SHIP should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since SHIP’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much SHIP moves relative to the rest of the market.
What kind of growth will SHIP generate?
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. 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 SHIP future expectations. SHIP’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? SHIP’s optimistic future growth appears to have been factored into the current share price, 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 SHIP? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on SHIP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for SHIP, which means it’s worth further examining 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 Seanergy Maritime Holdings. You can find everything you need to know about SHIP in the latest infographic research report. If you are no longer interested in Seanergy Maritime 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.