Today we’re going to take a look at the well-established China Overseas Land & Investment Limited (SEHK:688). The company’s stock received a lot of attention from a substantial price movement on the SEHK in the over the last few months, increasing to HK$27.3 at one point, and dropping to the lows of HK$23.7. 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 China Overseas Land & Investment’s current trading price of HK$24.05 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at China Overseas Land & Investment’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 China Overseas Land & Investment
What is China Overseas Land & Investment worth?
Good news, investors! China Overseas Land & Investment is still a bargain right now. According to my valuation, the intrinsic value for the stock is HK$87.14, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that China Overseas Land & Investment’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 China Overseas Land & Investment?
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 the company’s future expectations. However, with a relatively muted profit growth of 6.35% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for China Overseas Land & Investment, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since China Overseas Land & Investment is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.