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Kiwi Property Group Limited (NZSE:KPG), a reits company based in New Zealand, saw significant share price volatility over the past couple of months on the NZSE, rising to the highs of NZ$13.55 and falling to the lows of NZ$1.31. 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 Kiwi Property Group’s current trading price of NZ$1.34 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 Kiwi Property Group’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 Kiwi Property Group
Is Kiwi Property Group still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3% above my intrinsic value, which means if you buy Kiwi Property Group today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is NZ$1.29, there’s only an insignificant downside when the price falls to its real value. Furthermore, Kiwi Property Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Can we expect growth from Kiwi Property Group?
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. However, with a negative profit growth of -16.16% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Kiwi Property Group. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Currently, KPG 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 de-risk 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.