Is It The Right Time To Buy Stockland (ASX:SGP)?
Stockland (ASX:SGP), a reits company based in Australia, saw its share price hover around a small range of A$3.91 to A$4.27 over the last few weeks. But is this actually reflective of the share value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Stockland’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 Stockland
What’s the opportunity in Stockland?
Great news for investors – Stockland is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is A$5.55, but it is currently trading at AU$4.17 on the share market, meaning that there is still an opportunity to buy now. Stockland’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 Stockland?
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 a negative profit growth of -12.34% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Stockland. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although SGP is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to SGP, 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 SGP 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 Stockland. You can find everything you need to know about Stockland in the latest infographic research report. If you are no longer interested in Stockland, 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.
