Perennial Real Estate Holdings Limited (SGX:40S), a real estate company based in Singapore, saw its share price hover around a small range of SGD0.83 to SGD0.89 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Perennial Real Estate Holdings’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 Perennial Real Estate Holdings

Is Perennial Real Estate Holdings still cheap?

Good news, investors! Perennial Real Estate Holdings is still a bargain right now. According to my valuation, the intrinsic value for the stock is SGD11.57, but it is currently trading at S$0.88 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Perennial Real Estate Holdings’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, 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.

Can we expect growth from Perennial Real Estate Holdings?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 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 Perennial Real Estate Holdings, at least in the near future.

What this means for you:

Are you a shareholder? Although 40S is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to 40S, 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 40S for some time, but hesitant on making the leap, I recommend you dig deeper 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 Perennial Real Estate Holdings. You can find everything you need to know about Perennial Real Estate Holdings in the latest infographic research report. If you are no longer interested in Perennial Real Estate Holdings, 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.