The current Market Capitalization (MC) for Napier Port Holdings (NPH) is $635.6m. Pro forma (underlying) NPAT for the half year rose 6.7% to $11.2 million. After having removed current liabilities from current assets (cash type assets), they have $28.5m (cash and effectively equivalents) in the bank. Removing that from the MC, then dividing by NPAT gives a ratio of 54.
Wowzer that’s an expensive stock relative to earnings – it’s even more expensive that it’s comparable, Port of Tauranga Limited. Especially when you look at this from the perspective of an oncoming recession.
Given the headwinds (to reference a term in the HY20 Investor Presentation), the outlook for the coming year isn’t great (damaged economy on top of an excess of logs in China already and weakening demand, etc). Other than that, and the high MC to NPAT ratio, I didn’t spot anything else that alarmed me in the report. Their long term plans continue to be in motion. With this in consideration, I won’t be buying more NPH shares at the moment.