At $35.2, Is Seritage Growth Properties (NYSE:SRG) A Buy?
Seritage Growth Properties (NYSE:SRG), a reits company based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $42.77 and falling to the lows of $34.5. 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 Seritage Growth Properties’s current trading price of $35.2 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Seritage Growth Properties’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Seritage Growth Properties
Is Seritage Growth Properties still cheap?
Seritage Growth Properties appears to be overvalued by 27% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$35.20 on the market compared to my intrinsic value of $27.63. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Seritage Growth Properties’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Seritage Growth Properties?
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 an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Seritage Growth Properties, at least in the near future.
What this means for you:
Are you a shareholder? If you believe SRG 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 uncertainty from negative growth in the future, this could be the right time to de-risk your portfolio. 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 SRG 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?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Seritage Growth Properties. You can find everything you need to know about Seritage Growth Properties in the latest infographic research report. If you are no longer interested in Seritage Growth Properties, 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.
