Weichai Power Co., Ltd.’s (HKG:2338) Share Price Could Signal Some Risk
With a median price-to-earnings (or “P/E”) ratio of close to 10x in Hong Kong, you could be forgiven for feeling indifferent about Weichai Power Co., Ltd.’s (HKG:2338) P/E ratio of 8.3x. While this might not raise any eyebrows, if the P/E ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
Recent times have been advantageous for Weichai Power as its earnings have been rising faster than most other companies. One possibility is that the P/E is moderate because investors think this strong earnings performance might be about to tail off. If you like the company, you’d be hoping this isn’t the case so that you could potentially pick up some stock while it’s not quite…
