Is Now An Opportune Moment To Examine First Capital Real Estate Investment Trust (TSE:FCR.UN)?
First Capital Real Estate Investment Trust (TSE:FCR.UN), which is in the reits business, and is based in Canada, saw a decent share price growth in the teens level on the TSX over the last few months. As a CA$2.9b market cap stock, it seems odd First Capital Real Estate Investment Trust is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s examine First Capital Real Estate Investment Trust’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for First Capital Real Estate Investment Trust
Is First Capital Real Estate Investment Trust still cheap?
Great news for investors – First Capital Real Estate Investment Trust is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is CA$21.33, but it is currently trading at CA$13.02 on the share market, meaning that there is still an opportunity to buy now. However, given that First Capital Real Estate Investment Trust’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of First Capital Real Estate Investment Trust 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. Though in the case of First Capital Real Estate Investment Trust, it is expected to deliver a negative revenue growth of -6.7% next year, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although FCR.UN is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to FCR.UN, 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 an eye on FCR.UN for a while, 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 First Capital Real Estate Investment Trust. You can find everything you need to know about First Capital Real Estate Investment Trust in the latest infographic research report. If you are no longer interested in First Capital Real Estate Investment Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.
