Oxley Holdings Limited (SGX:5UX), a real estate company based in Singapore, saw a decent share price growth in the teens level on the SGX over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Oxley Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Oxley Holdings
What’s the opportunity in Oxley Holdings?
Great news for investors – Oxley Holdings is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is SGD0.9, but it is currently trading at SGD0.7 on the share market, meaning that there is still an opportunity to buy now. Oxley Holdings’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will Oxley Holdings generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Oxley Holdings’s earnings over the next few years are expected to increase by 27.01%, 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? Since Oxley Holdings is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on Oxley Holdings for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy Oxley Holdings. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.