At $0.63, Is It Time To Buy RAIT Financial Trust (NYSE:RAS)?
RAIT Financial Trust (NYSE:RAS), a reits company based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at RAIT Financial Trust’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for RAIT Financial Trust
Is RAIT Financial Trust still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7% below my intrinsic value, which means if you buy RAIT Financial Trust today, you’d be paying a fair price for it. And if you believe the company’s true value is $0.68, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because RAIT Financial Trust’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will RAIT Financial Trust 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. RAIT Financial Trust’s earnings over the next few years are expected to increase by 89.22%, 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 RAIT Financial Trust’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 financial strength of the company. 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 RAIT Financial Trust, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on RAIT Financial Trust. You can find everything you need to know about RAIT Financial Trust in the latest infographic research report. If you are no longer interested in RAIT Financial Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
