Sun Communities Inc (NYSE:SUI), a reits company based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $98.29 at one point, and dropping to the lows of $87.95. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Sun Communities’s current trading price of $96.52 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sun Communities’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 Sun Communities
What is Sun Communities worth?According to my valuation model, Sun Communities seems to be fairly priced at around 17.66% below my intrinsic value, which means if you buy Sun Communities today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $117.22, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like Sun Communities’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Sun Communities look like?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. In the upcoming year, Sun Communities’s earnings are expected to increase by 73.98%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in SUI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on SUI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Sun Communities. You can find everything you need to know about Sun Communities in the latest infographic research report. If you are no longer interested in Sun Communities, you can use our free platform to see my list of over 50 other stocks with a high growth potential.