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Government Properties Income Trust (NASDAQ:GOV), a reits company based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $18.68 and falling to the lows of $13.5. 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 Government Properties Income Trust’s current trading price of $13.93 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 Government Properties Income Trust’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 Government Properties Income Trust
What’s the opportunity in Government Properties Income Trust?
Great news for investors – Government Properties Income Trust is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $24.02, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Government Properties Income Trust’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Government Properties Income Trust generate?
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. Government Properties Income Trust’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since GOV is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.