Acadia Realty Trust (NYSE:AKR), which is in the reits business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Acadia Realty Trust’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Is Acadia Realty Trust still cheap?
Good news, investors! Acadia Realty Trust is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $28.14, but it is currently trading at US$15.17 on the share market, meaning that there is still an opportunity to buy now. Acadia Realty Trust’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Acadia Realty 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Acadia Realty Trust, at least in the near future.
What this means for you:
Are you a shareholder? Although AKR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to AKR, 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 tabs on AKR for some time, 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 Acadia Realty Trust. You can find everything you need to know about Acadia Realty Trust in the latest infographic research report. If you are no longer interested in Acadia Realty 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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