Is It Too Late To Consider Buying Kennedy-Wilson Holdings, Inc. (NYSE:KW)?
While Kennedy-Wilson Holdings, Inc. (NYSE:KW) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$25.22 at one point, and dropping to the lows of US$20.24. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Kennedy-Wilson Holdings' current trading price of US$20.24 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Kennedy-Wilson 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 Kennedy-Wilson Holdings
What is Kennedy-Wilson Holdings worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 20.00% above my intrinsic value, which means if you buy Kennedy-Wilson Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $16.87, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Kennedy-Wilson Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Kennedy-Wilson Holdings 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 the company's future expectations. Though in the case of Kennedy-Wilson Holdings, it is expected to deliver a highly negative earnings growth in the upcoming, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Currently, KW appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on KW for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on KW should the price fluctuate below its true value.
If you'd like to know more about Kennedy-Wilson Holdings as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 4 warning signs we've spotted with Kennedy-Wilson Holdings (including 2 which don't sit too well with us).
If you are no longer interested in Kennedy-Wilson Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
