Advanced Flower Capital Stock: The Bull Case After A Brutal Sell-Off

Investor's Compass
776 Followers
(10min)

Summary

  • Advanced Flower Capital's Q4 earnings report led to a 20%+ stock drop in a single day due to a dividend cut from $0.33 to $0.23 per share.
  • Despite borrower issues, AFCG offers a 14.6% yield and trades at 0.7x book value, presenting a potential investment opportunity.
  • Management's ability to recover and redeploy capital from troubled loans is crucial for sustaining dividends and improving distributable earnings.
  • I have issues with pre-set origination targets and the lack of borrower transparency, making AFCG a cautious buy with limited allocation.

Ditch Weed

Annie Otzen

Advanced Flower Capital Overview

Advanced Flower Capital (NASDAQ:AFCG), a cannabis mortgage REIT, disappointed investors with its last earnings report on March 13, sending the stock down over 20% in a single session. What happened? The dividend was cut from a quarterly

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776 Followers
I objectively search for undervalued stocks of any size across a wide variety of industries using quantitative methods that I've thoroughly backtested for success. I believe the numbers are more important than the story (most of the time), as they tend to paint a more realistic picture of the company’s prospects. I have been investing since 2013. Apart from what I’ve learned from experience, my knowledge comes from reading a vast number of stock market books over the years. Some of my favorites include 100 Baggers, Financial Shenanigans, and The Quants.Earlier part of StockBros Research and now writing under this account.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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