Time To Buy HHH Stock?
Recent reports have put Howard Hughes Holdings (NYSE:HHH) stock in the spotlight, revealing that Bill Ackman's Pershing Square Capital Management has secured a $900 million deal to increase its control over the company. This acquisition, priced at a substantial 48% premium over the Friday, May 2nd closing price of approximately $68, elevates Pershing Square's total stake to 46.9%.
Given this significant development, a key question arises: Is HHH stock a buy at around $70? We think so. While acknowledging near-term headwinds such as elevated interest rates, macroeconomic uncertainty, and ongoing trade tensions, our conclusion is based on a comparative assessment of HHH stock's current valuation against its recent operating performance and its present and historical financial health.
Our evaluation of Howard Hughes across crucial metrics—Growth, Profitability, Financial Stability, and Downturn Resilience—indicates a robust operating performance and a solid financial condition, the details of which are provided below.
However, for investors who seek lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
Going by what you pay per dollar of sales or profit, HHH stock looks slightly cheap compared to the broader market.
Howard Hughes' Revenues have grown considerably over recent years.
Howard Hughes' profit margins are around the median level for companies in the Trefis coverage universe.
Howard Hughes' balance sheet looks weak.
In summary, Howard Hughes' performance across the parameters detailed above are as follows:
In summary, HHH stock has demonstrated strong performance across the aforementioned metrics, and its current valuation appears attractive. Therefore, we believe the stock presents a good buying opportunity at its current levels. Supporting this view, the average analyst price target of $90 suggests a potential upside of approximately 30% from the current price.
While HHH stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
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