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Urban Edge Properties (NYSE:UE), which is in the reits business, and is based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$20.89 at one point, and dropping to the lows of US$16.91. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Urban Edge Properties's current trading price of US$16.91 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Urban Edge Properties’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 Urban Edge Properties?
Great news for investors – Urban Edge Properties is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $24.57, but it is currently trading at US$16.91 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Urban Edge Properties’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.
What does the future of Urban Edge Properties 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Urban Edge Properties, at least in the near future.
What this means for you:
Are you a shareholder? Although UE 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 UE, 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 UE 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 Urban Edge Properties. You can find everything you need to know about Urban Edge Properties in the latest infographic research report. If you are no longer interested in Urban Edge Properties, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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