AFC Gamma: Why This 10% Yield Is A Speculative Deep Value Pick

BeanKounter Capital
5.24K Followers

Summary

  • AFCG went public in the middle of 2021 and has already grown the dividend from $0.38 to $0.50.
  • The company's loan portfolio generates huge yields, which are likely to compress as new regulation allows other, newer competitors to enter the space.
  • The business is flush with cash and is growing the loan portfolio at a rapid pace.
  • AFCG has insider ownership over 25%, so management definitely has skin in the game.
  • Add in an earnings multiple of 8.5x and AFCG is an intriguing mix of speculation and deep value that could be extremely lucrative if management continues to execute.

Financial Growth

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In today's world of 0% interest rates, money printing, and unprofitable companies, speculation has been very rewarding for investors during this bull market. However, there will always be investors looking for income, and there will always be yield hungry investors that chase double

This article was written by

5.24K Followers
You can find me on Substack at Kontrarian Korner: CPA and former Big 4 auditor. I break down investments in qualitative and quantitative terms, and I look for investments that will compound my money over the long term.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AFCG, IIPR, NLCP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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