CapitaLand Mall Trust (SGX:C38U), a equity real estate investment trusts (reits) company based in Singapore, maintained its current share price over the past couple of month on the SGX, with a relatively tight range of SGD2.01 to SGD2.15. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CapitaLand Mall Trust’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 CapitaLand Mall Trust
Is CapitaLand Mall Trust still cheap?
According to my valuation model, the stock is currently overvalued by about 22%, trading at SGD2.13 compared to my intrinsic value of SGD1.74. Not the best news for investors looking to buy! In addition to this, it seems like CapitaLand Mall Trust’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, 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 CapitaLand Mall Trust 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. Though in the case of CapitaLand Mall Trust, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? If you believe CapitaLand Mall Trust is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on CapitaLand Mall Trust for a while, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?