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Should You Think About Buying Bank of Hawaii Corporation (NYSE:BOH) Now?

Bank of Hawaii Corporation (NYSE:BOH), operating in the financial services industry based in United States, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of US$79.81 to US$87.55. However, is this the true valuation level of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Bank of Hawaii’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 Bank of Hawaii

Is Bank of Hawaii still cheap?

According to my valuation model, Bank of Hawaii seems to be fairly priced at around 8.8% below my intrinsic value, which means if you buy Bank of Hawaii today, you’d be paying a fair price for it. And if you believe the company’s true value is $95.51, then there’s not much of an upside to gain from mispricing. In addition to this, Bank of Hawaii has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Bank of Hawaii look like?

NYSE:BOH Past and Future Earnings, October 23rd 2019
NYSE:BOH Past and Future Earnings, October 23rd 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Bank of Hawaii, it is expected to deliver a negative earnings growth of -1.2%, 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? BOH seems fairly priced right now, 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 an eye on BOH 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. Furthermore, 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 BOH should the price fluctuate below its true value.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Bank of Hawaii. You can find everything you need to know about Bank of Hawaii in the latest infographic research report. If you are no longer interested in Bank of Hawaii, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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