Suntec Real Estate Investment Trust (SGX:T82U), which is in the reits business, and is based in Singapore, saw a significant share price rise of over 20% in the past couple of months on the SGX. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Suntec Real Estate Investment Trust’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What is Suntec Real Estate Investment Trust worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.19% above my intrinsic value, which means if you buy Suntec Real Estate Investment Trust today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is SGD1.54, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Suntec Real Estate Investment Trust has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will Suntec Real Estate Investment Trust generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Suntec Real Estate Investment Trust, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? T82U seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on T82U for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on T82U should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Suntec Real Estate Investment Trust. You can find everything you need to know about Suntec Real Estate Investment Trust in the latest infographic research report. If you are no longer interested in Suntec Real Estate Investment Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.