ASX:NKP PE PEG Gauge Jan 29th 18
Metals and mining companies are typically trading at a PE of 15.5x, relatively similar to the rest of the Australian stock market PE of 18.1x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. Furthermore, the industry returned a similar 10.35% on equities compared to the market’s 11.86%. Since Nkwe Platinum’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Nkwe Platinum’s value is to assume the stock should be relatively in-line with its industry.
Next Steps:
Nkwe Platinum recently delivered an industry-beating growth rate in earnings, which is a positive for shareholders. If the stock has been on your watchlist for a while, now may be the time to buy, if you like its ability to deliver growth and are not highly concentrated in the materials industry. However, before you make a decision on the stock, I suggest you look at Nkwe Platinum’s fundamentals in order to build a holistic investment thesis.
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.