Yahoo Finance At S$01.58, Is It Time To Buy OUE Limited (SGX:LJ3)?
OUE Limited (SGX:LJ3), 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 SGD1.87 and falling to the lows of SGD1.56. 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 OUE’s current trading price of SGD1.58 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 OUE’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 OUE
What’s the opportunity in OUE?
Great news for investors – OUE is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is SGD4.14, but it is currently trading at S$1.58 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that OUE’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 OUE 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 a relatively muted profit growth of 7.56% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for OUE, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since LJ3 is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LJ3 for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LJ3. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on OUE. You can find everything you need to know about OUE in the latest infographic research report. If you are no longer interested in OUE, 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.
