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True North Commercial Real Estate Investment Trust (TSE:TNT.UN), which is in the reits business, and is based in Canada, saw its share price hover around a small range of CA$6.25 to CA$6.71 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at True North Commercial Real Estate Investment Trust’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is True North Commercial Real Estate Investment Trust still cheap?Great news for investors – True North Commercial Real Estate Investment Trust is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is CA$12.62, but it is currently trading at CA$6.66 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that True North Commercial Real Estate Investment Trust’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will True North Commercial Real Estate Investment Trust generate?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of True North Commercial 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? Although TNT.UN is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to TNT.UN, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on TNT.UN for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on True North Commercial Real Estate Investment Trust. You can find everything you need to know about True North Commercial Real Estate Investment Trust in the latest infographic research report. If you are no longer interested in True North Commercial Real Estate Investment Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.