Segro PLC Stock Shows Every Sign Of Being Modestly Overvalued
In This Article:
- By GF Value
The stock of Segro PLC (OTCPK:SEGXF, 30-year Financials) is estimated to be modestly overvalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $13.49 per share and the market cap of $16.4 billion, Segro PLC stock gives every indication of being modestly overvalued. GF Value for Segro PLC is shown in the chart below.
Because Segro PLC is relatively overvalued, the long-term return of its stock is likely to be lower than its business growth, which averaged 6.9% over the past three years and is estimated to grow 5.37% annually over the next three to five years.
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Since investing in companies with low financial strength could result in permanent capital loss, investors must carefully review a company's financial strength before deciding whether to buy shares. Looking at the cash-to-debt ratio and interest coverage can give a good initial perspective on the company's financial strength. Segro PLC has a cash-to-debt ratio of 0.04, which ranks in the middle range of the companies in REITs industry. Based on this, GuruFocus ranks Segro PLC's financial strength as 5 out of 10, suggesting fair balance sheet. This is the debt and cash of Segro PLC over the past years:
Investing in profitable companies carries less risk, especially in companies that have demonstrated consistent profitability over the long term. Typically, a company with high profit margins offers better performance potential than a company with low profit margins. Segro PLC has been profitable 8 years over the past 10 years. During the past 12 months, the company had revenues of $561.9 million and earnings of $1.643 a share. Its operating margin of 63.91% better than 75% of the companies in REITs industry. Overall, GuruFocus ranks Segro PLC's profitability as fair. This is the revenue and net income of Segro PLC over the past years: