Should You Think About Buying APAC Realty Limited (SGX:CLN) Now?

APAC Realty Limited (SGX:CLN), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SGX over the last few months, increasing to S$0.47 at one point, and dropping to the lows of S$0.41. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether APAC Realty's current trading price of S$0.41 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 APAC Realty’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 APAC Realty

What's The Opportunity In APAC Realty?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that APAC Realty’s ratio of 12.37x is trading slightly below its industry peers’ ratio of 13.54x, which means if you buy APAC Realty today, you’d be paying a decent price for it. And if you believe APAC Realty should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since APAC Realty’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will APAC Realty generate?

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. With profit expected to grow by 26% over the next couple of years, the future seems bright for APAC Realty. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? CLN’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at CLN? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on CLN, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for CLN, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about APAC Realty as a business, it's important to be aware of any risks it's facing. For example - APAC Realty has 2 warning signs we think you should be aware of.

If you are no longer interested in APAC Realty, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.