UDR Inc (NYSE:UDR), a reits company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $38.62 at one point, and dropping to the lows of $32.92. 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 UDR’s current trading price of $34.77 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 UDR’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for UDR
Is UDR still cheap?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8% above my intrinsic value, which means if you buy UDR today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $32.26, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like UDR’s share price is quite stable, which could mean 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 UDR 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. Though in the case of UDR, it is expected to deliver a negative earnings growth of -17.50%, 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? UDR seems fairly priced right now, 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 UDR for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears 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 crystalize your views on UDR 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 UDR. You can find everything you need to know about UDR in the latest infographic research report. If you are no longer interested in UDR, you can use our free platform to see my list of over 50 other stocks with a high growth potential.