Why Saul Centers, Inc. (NYSE:BFS) Could Be Worth Watching

January 28, 2020
  •  Updated
August 16, 2022
NYSE:BFS
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Saul Centers, Inc. (NYSE:BFS), which is in the reits business, and is based in United States, saw a decent share price growth in the teens level on the NYSE over the last few months. Less-covered, small caps sees 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 examine Saul Centers’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Saul Centers

Is Saul Centers still cheap?

According to my valuation model, Saul Centers seems to be fairly priced at around 19% below my intrinsic value, which means if you buy Saul Centers today, you’d be paying a fair price for it. And if you believe the company’s true value is $69.53, then there’s not much of an upside to gain from mispricing. What's more, Saul Centers’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Saul Centers generate?

NYSE:BFS Past and Future Earnings, January 29th 2020
NYSE:BFS Past and Future Earnings, January 29th 2020

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 Saul Centers, it is expected to deliver a negative earnings growth of -3.3%, 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? Currently, BFS appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BFS for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on BFS should the price fluctuate below its true value.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Saul Centers. You can find everything you need to know about Saul Centers in the latest infographic research report. If you are no longer interested in Saul Centers, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.

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About NYSE:BFS

Saul Centers

Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 60 properties which includes (a) 50 community and neighborhood shopping centers and seven mixed-use properties with approximately 9.8 million square feet of leasable area and (b) three land and development properties.

6 star dividend payer and good value.