CapitaLand Mall Trust (SGX:C38U), a equity real estate investment trusts (reits) company based in Singapore, saw its share price hover around a small range of SGD2 to SGD2.12 over the last few weeks. But is this actually reflective of the share value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CapitaLand Mall Trust’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for CapitaLand Mall Trust
What is CapitaLand Mall Trust worth?According to my valuation model, the stock is currently overvalued by about 21%, trading at SGD2.12 compared to my intrinsic value of SGD1.75. Not the best news for investors looking to buy! Another thing to keep in mind is that CapitaLand Mall Trust’s share price is 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.
Can we expect growth from CapitaLand Mall Trust?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 CapitaLand Mall 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? If you believe CapitaLand Mall Trust is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on CapitaLand Mall Trust for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on CapitaLand Mall Trust. You can find everything you need to know about CapitaLand Mall Trust in the latest infographic research report. If you are no longer interested in CapitaLand Mall 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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Simply Wall St has no position in any of the companies mentioned. This article 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.
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