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The real estate sector performs relatively in-line with the wider economy. Prosperous periods bring about high growth and inflation, leading to strong returns in real estate investments. Firm Capital Property Trust and BTB Real Estate Investment Trust are real estate companies that are currently trading below what they’re actually worth. Investors can profit from the difference by investing in these cyclical stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Firm Capital Property Trust (TSXV:FCD.UN)
Firm Capital Property Trust is focused on creating long-term value for Unitholders, through capital preservation and disciplined investing to achieve stable distributable income. Firm Capital Property Trust was founded in 2007 and has a market cap of CAD CA$101.81M, putting it in the small-cap stocks category.
FCD.UN’s shares are currently hovering at around -50% beneath its actual worth of $12.66, at a price tag of CA$6.33, based on its expected future cash flows. The discrepancy signals an opportunity to buy low. Furthermore, FCD.UN’s PE ratio is currently around 5.3x compared to its REITs peer level of, 9.47x implying that relative to its peers, we can purchase FCD.UN’s shares for cheaper. FCD.UN is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. More detail on Firm Capital Property Trust here. TSXV:FCD.UN PE PEG Gauge Apr 16th 18
BTB Real Estate Investment Trust (TSX:BTB.UN)
BTB is a real estate investment trust listed on the Toronto Stock Exchange. Formed in 2005, and currently lead by Michel Léonard, the company size now stands at 60 people and has a market cap of CAD CA$221.71M, putting it in the small-cap group.
BTB.UN’s stock is currently hovering at around -51% less than its actual value of $9.38, at a price of CA$4.56, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. In addition to this, BTB.UN’s PE ratio is around 7.07x compared to its REITs peer level of, 9.47x meaning that relative to its peers, BTB.UN’s shares can be purchased for a lower price. BTB.UN is also strong in terms of its financial health, with near-term assets able to cover upcoming and long-term liabilities. More detail on BTB Real Estate Investment Trust here. TSX:BTB.UN PE PEG Gauge Apr 16th 18
Automotive Properties Real Estate Investment Trust (TSX:APR.UN)
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. Automotive Properties Real Estate Investment Trust was started in 2015 and has a market cap of CAD CA$270.91M, putting it in the small-cap stocks category.
APR.UN’s stock is currently hovering at around -53% under its actual value of $22.06, at the market price of CA$10.36, according to my discounted cash flow model. This mismatch indicates a chance to invest in APR.UN at a discounted price. Also, APR.UN’s PE ratio is trading at around 6.4x relative to its REITs peer level of, 9.47x suggesting that relative to its peers, you can purchase APR.UN’s stock for a lower price right now. APR.UN is also a financially robust company, with near-term assets able to cover upcoming and long-term liabilities. More detail on Automotive Properties Real Estate Investment Trust here. TSX:APR.UN PE PEG Gauge Apr 16th 18
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
TOP undervalued stocks for 2017
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