Yahoo Finance At AU$03.69, Is Growthpoint Properties Australia (ASX:GOZ) A Buy?
Growthpoint Properties Australia (ASX:GOZ), a reits company based in Australia, saw a decent share price growth in the teens level on the ASX over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Growthpoint Properties Australia’s outlook and value based on the most recent financial data to see if the opportunity still exists. View out our latest analysis for Growthpoint Properties Australia
What’s the opportunity in Growthpoint Properties Australia?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.89% below my intrinsic value, which means if you buy Growthpoint Properties Australia today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth A$4.14, then there’s not much of an upside to gain from mispricing. In addition to this, it seems like Growthpoint Properties Australia’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Growthpoint Properties Australia?
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. Though in the case of Growthpoint Properties Australia, 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? GOZ seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on GOZ for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on GOZ should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Growthpoint Properties Australia. You can find everything you need to know about Growthpoint Properties Australia in the latest infographic research report. If you are no longer interested in Growthpoint Properties Australia, 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.
