Should You Buy Green REIT plc (ISE:GN1)?
Green REIT plc (ISE:GN1), a reits company based in Ireland, maintained its current share price over the past couple of month on the ISE, with a relatively tight range of €1.47 to €1.59. 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 Green REIT’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Green REIT
Is Green REIT still cheap?
Green REIT appears to be overvalued by 46.36% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €1.50 on the market compared to my intrinsic value of €1.03. Not the best news for investors looking to buy! Furthermore, Green REIT’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from Green REIT?
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 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 Green REIT, at least in the near future.
What this means for you:
Are you a shareholder? If you believe GN1 should trade below its current price, 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 GN1 for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative 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 Green REIT. You can find everything you need to know about Green REIT in the latest infographic research report. If you are no longer interested in Green REIT, 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.
