RPT Realty (NYSE:RPT), which is in the reits business, and is based in United States, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of US$13.95 to US$15.04. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at RPT Realty’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's the opportunity in RPT Realty?
Good news, investors! RPT Realty is still a bargain right now. According to my valuation, the intrinsic value for the stock is $26.69, 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, RPT Realty’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from RPT Realty?
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 -20% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for RPT Realty. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although RPT 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 RPT, 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 RPT 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 RPT Realty. You can find everything you need to know about RPT Realty in the latest infographic research report. If you are no longer interested in RPT Realty, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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