Is There Now An Opportunity In OUE Hospitality Trust (SGX:SK7)?
OUE Hospitality Trust (SGX:SK7), a equity real estate investment trusts (reits) company based in Singapore, maintained its current share price over the past couple of month on the SGX, with a relatively tight range of SGD0.77 to SGD0.84. 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 SK7’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 OUE Hospitality Trust
What is SK7 worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19% below my intrinsic value, which means if you buy SK7 today, you’d be paying a fair price for it. And if you believe that SK7 is really worth SGD1.02, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, it seems like SK7’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because SK7’s stock is less volatile than the wider market given its low beta.
Can we expect growth from SK7?
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 SK7 future expectations. With profit expected to more than double over the next couple of years, the future seems bright for SK7. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? SK7’s optimistic future growth appears to have been factored into the current share price, 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 SK7? 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 SK7, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for SK7, which means it’s worth further examining 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 OUE Hospitality Trust. You can find everything you need to know about SK7 in the latest infographic research report. If you are no longer interested in OUE Hospitality 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.
