While Globe Trade Centre S.A. (WSE:GTC) might not be the most widely known stock at the moment, it led the WSE gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Globe Trade Centre’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Globe Trade Centre
What is Globe Trade Centre worth?
Great news for investors – Globe Trade Centre is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is PLN10.81, but it is currently trading at zł7.10 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Globe Trade Centre’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 Globe Trade Centre?
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 Globe Trade Centre, it is expected to deliver a relatively unexciting top-line growth of 7.4% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since GTC is currently undervalued, it may be a great time to increase your holdings in the stock. 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 GTC for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GTC. 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.
If you'd like to know more about Globe Trade Centre as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Globe Trade Centre you should be aware of.
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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.
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About WSE:GTC
Globe Trade Centre
A real estate developer and investor company, engages in the development, management, and rental of office and retail space properties.
Very undervalued second-rate dividend payer.
