Ascendas India Trust (SGX:CY6U), a real estate management and development company based in Singapore, saw significant share price volatility over the past couple of months on the SGX, rising to the highs of SGD1.16 and falling to the lows of SGD1.04. 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 CY6U’s current trading price of SGD1.14 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CY6U’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 Ascendas India Trust
What is CY6U worth?
Good news, investors! CY6U is still a bargain right now. According to my valuation, the intrinsic value for the stock is SGD4.26, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, CY6U’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because CY6U’s stock is less volatile than the wider market given its low beta.
What kind of growth will CY6U generate?
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. 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 CY6U future expectations. 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 CY6U, at least in the near future.
What this means for you:
Are you a shareholder? Although CY6U is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to CY6U, 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 CY6U for some time, but hesitant on making the leap, I recommend you dig deeper 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.