AFC Gamma: An Interesting Speculation With A 13.1% Yield

BeanKounter Capital
5.24K Followers

Summary

  • AFCG is a small cap mortgage REIT focused on lending to businesses in the cannabis industry.
  • This might be a turn-off for some, but the complexity allows AFCG to get double-digit yields on their loan portfolio.
  • The external management is another thing to be aware of, but the insider ownership is high.
  • The company focuses on limited license jurisdictions to help reduce their risk.
  • Shares trade near book value, and I think the risk/reward is skewed to the upside.

Residential real estate loan, financial concept : House model, coins, US dollar bag, white clock on a table, depicts home loan or borrowing money to buy / purchase a new home for first time homebuyer

William_Potter

It's been a while since I wrote an article on AFC Gamma (NASDAQ:AFCG). Since May, shares have basically chopped sideways (while paying out two $0.56 quarterly dividends), but I figured it was high time that I wrote an update on this cannabis

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, REFI 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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