Undervalued shares

HSBC Malta's shares closed at Lm5.94 in the week ending February 6. With earnings per share for the trailing 12 months at Lm0.421, the company's price to earnings ratio (P/E) stands at 14.11. Now HSBC International shares have a P/E of 22.6, meaning...

HSBC Malta's shares closed at Lm5.94 in the week ending February 6. With earnings per share for the trailing 12 months at Lm0.421, the company's price to earnings ratio (P/E) stands at 14.11.

Now HSBC International shares have a P/E of 22.6, meaning that the Malta subsidiary shares are trading at a huge discount. Given that HSBC Malta's shares trade at the same P/E multiple as its mother company, current shares will have to appreciate by 60 per cent from their current Lm5.94 level all the way up to Lm9.50!

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