Have Investors Already Priced In Five Oaks Investment Corp’s (OAKS) Growth?
Five Oaks Investment Corp (NYSE:OAKS), a mortgage real estate investment trusts (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 $4.68 and falling to the lows of $3.98. 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 OAKS’s current trading price of $4.16 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 OAKS’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 Five Oaks Investment
Is OAKS still cheap?
Good news, investors! OAKS is still a bargain right now. According to my valuation, the intrinsic value for the stock is $5.75, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, OAKS’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much OAKS moves relative to the rest of the market.
What does the future of OAKS look like?
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. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for OAKS, at least in the near future.
What this means for you:
Are you a shareholder? Although OAKS is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to OAKS, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on OAKS for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Five Oaks Investment. You can find everything you need to know about OAKS in the latest infographic research report. If you are no longer interested in Five Oaks Investment, 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.
