OUE Commercial Real Estate Investment Trust (SGX:TS0U), a equity real estate investment trusts (reits) company based in Singapore, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of SGD0.69 to SGD0.73. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at OUE Commercial Real Estate Investment Trust’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 OUE Commercial Real Estate Investment Trust
What is OUE Commercial Real Estate Investment Trust worth?
Good news, investors! OUE Commercial Real Estate Investment Trust is still a bargain right now. According to my valuation, the intrinsic value for the stock is SGD1.44, but it is currently trading at SGD0.72 on the share market, meaning that there is still an opportunity to buy now. OUE Commercial Real Estate Investment Trust’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 does the future of OUE Commercial Real Estate Investment Trust look like?
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 -9.95% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for OUE Commercial Real Estate Investment Trust. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although OUE Commercial Real Estate Investment Trust is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to OUE Commercial Real Estate Investment Trust, 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 OUE Commercial Real Estate Investment Trust 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.