Today we’re going to take a look at the well-established Sino Land Company Limited (SEHK:83). The company’s stock maintained its current share price over the past couple of month on the SEHK, with a relatively tight range of HK$13.2 to HK$14.22. However, does this price actually reflect the true value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sino Land’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 Sino Land
Is Sino Land still cheap?
The stock is currently trading at HK$13.2 on the share market, which means it is overvalued by 54% compared to my intrinsic value of HK$8.55. This means that the opportunity to buy Sino Land at a good price has disappeared! Another thing to keep in mind is that Sino Land’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Sino Land?
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. Though in the case of Sino Land, it is expected to deliver a highly negative earnings growth in the next few years, 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? If you believe Sino Land is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on Sino Land for some time, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?