Keppel DC REIT (SGX:AJBU), a equity real estate investment trusts (reits) company based in Singapore, maintained its current share price over the past couple of month on the SGX, with a relatively tight range of SGD1.34 to SGD1.44. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Keppel DC REIT’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 Keppel DC REIT
Is Keppel DC REIT still cheap?
According to my valuation model, Keppel DC REIT seems to be fairly priced at around 2% below my intrinsic value, which means if you buy Keppel DC REIT today, you’d be paying a fair price for it. And if you believe the company’s true value is SGD1.46, then there’s not much of an upside to gain from mispricing. In addition to this, it seems like Keppel DC REIT’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Keppel DC REIT 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. Keppel DC REIT’s earnings over the next few years are expected to increase by 53.08%, 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? It seems like the market has already priced in Keppel DC REIT’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on Keppel DC REIT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.