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Tuan Sing Holdings Limited (SGX:T24), a real estate company based in Singapore, saw significant share price volatility over the past couple of months on the SGX, rising to the highs of SGD0.46 and falling to the lows of SGD0.41. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Tuan Sing Holdings’s current trading price of SGD0.41 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Tuan Sing Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Tuan Sing Holdings
What’s the opportunity in Tuan Sing Holdings?
Great news for investors – Tuan Sing Holdings is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is SGD0.7, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Tuan Sing Holdings’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of Tuan Sing Holdings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. 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 Tuan Sing Holdings, at least in the near future.
What this means for you:
Are you a shareholder? Although T24 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 T24, 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 T24 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.