CapitaLand share price set for explosive bull run?

It has been a lost decade for CapitaLand share price as the real estate developer endured crisis after crisis ranging from the Great Financial Crisis to the European sovereign debt problem to the slew of property cooling measures unleashed by Singapore government. For sure, investors of CapitaLand had a roller coaster ride and suffered plenty of sleepless nights. But the sluggish CapitaLand share price looks set for a turbo-charged spin in the next six months. Read on to find out why CapitaLand could possibly stage a “return of the king” in the coming months.

Being one of the marquee assets of Temasek Holdings, CapitaLand is obviously one of the big boys in the real estate business. The company’s real estate and hospitality portfolio spans more than 120 cities in over 20 counties. In addition to this, CapitaLand also manages eight REITs and business trusts and twenty private funds. Given the diversified global portfolio (worth $129 billion), understanding this real estate giant is never easy but the biggest question among investors must be why CapitaLand share price had consistently been laggard for the past few years.

CapitaLand share price

If investors looked back, CapitaLand share price peaked at $7 to $8 back in 2007 but collapsed to the abysmal level of $2 during the Great Financial Crisis in 2009. Since then, CapitaLand share price never recovered to the peak and had been trading at the $3 to $4 bandwidth. Those who had bought at the peak in 2007 would have lost their pants even if the total dividends issued since 2007 ($1.20) had been factored in.

Despite the above, the current Price/Book Value is only 0.656, meaning that CapitaLand share price is trading at a level significantly below its book value. At current level, CapitaLand share price is certainly attractive in my point of view because this counter is fairly volatile with 5-year beta of 1.09 and average 3-month volume of 158 million shares. This means that CapitaLand share is not a dead stock and that it is possible to make money out of this counter if you set the appropriate entry and exit levels.

In my previous article on CapitaLand, I mentioned that the traditional best window to enter this counter is September to October. In view of this, has CapitaLand share really bottomed out and should investors strike while the iron is hot now?

CapitaLand share price in need of breakthrough

In retrospect, the Great Financial Crisis of 2009, followed by the European sovereign debts problem, had combined to shatter confidence in the property sector as buying sentiments diminished. The problem was compounded by the relentless property cooling measures implemented by Singapore government since 2009. As a result, CapitaLand share price lost its footing and had been struggling to find its fiery form.

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To be fair to the management, the poor valuation of CapitaLand share price is not due to its poor management or lacklustre business results. In fact, CapitaLand’s revenue actually [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: October 1, 2019 — 1:08 pm

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