Dream Industrial Real Estate Investment Trust (TSE:DIR.UN), which is in the reits business, and is based in Canada, led the TSX gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Dream Industrial Real Estate Investment Trust’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Is Dream Industrial Real Estate Investment Trust still cheap?Good news, investors! Dream Industrial Real Estate Investment Trust is still a bargain right now. According to my valuation, the intrinsic value for the stock is CA$20.86, but it is currently trading at CA$11.95 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Dream Industrial Real Estate Investment Trust’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Dream Industrial Real Estate Investment Trust?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With revenues expected to grow by 45% over the next couple of years, the future seems bright for Dream Industrial Real Estate Investment Trust. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since DIR.UN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on DIR.UN for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DIR.UN. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Dream Industrial Real Estate Investment Trust. You can find everything you need to know about Dream Industrial Real Estate Investment Trust in the latest infographic research report. If you are no longer interested in Dream Industrial 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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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.