ZIM - Ultimate Value Stock or Value Trap?
ZIM Integrated Shipping currently has a PE Ratio of 0.5 with a dividend yield of over 100%. Is it the ultimate value stock or a value trap?
ZIM Integrated Shipping stock is down over 70% while the stock fundamentals have been increasing in recent years. In 2019, the company had $300 million in Free cash flow. Today, the Free cash flow is over $6 billion, and the company is trading below free cash flow.
The catalyst behind this success was the supply chain disruptions, causing shipping prices to go up. This boom in business happened to competitors too. After any boom, there is a glut, and earnings are not expected to be that high. That's why the stock price is crashing. Has the market overreacted?