Frasers Hospitality Trust (SGX:ACV), 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 SGD0.76 to SGD0.79. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Frasers Hospitality 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 Frasers Hospitality Trust

What’s the opportunity in Frasers Hospitality Trust?

Good news, investors! Frasers Hospitality Trust is still a bargain right now. My valuation model shows that the intrinsic value for the stock is SGD1.14, but it is currently trading at SGD0.79 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Frasers Hospitality Trust’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 Frasers Hospitality 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. 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 Frasers Hospitality Trust, at least in the near future.

What this means for you:

Are you a shareholder? Although Frasers Hospitality Trust 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 Frasers Hospitality Trust, 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 Frasers Hospitality Trust for some time, but hesitant on making the leap, I recommend you research further 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 Frasers Hospitality Trust. You can find everything you need to know about Frasers Hospitality Trust in the latest infographic research report. If you are no longer interested in Frasers Hospitality Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.