MKZR

MacKenzie Realty ($MKZR) CEO Invests $240K As Stock Plunges 66% - Book Value Four Times Current Price

03/23/2025 09:45

As shares of MacKenzie Realty Capital Inc ($MKZR) have experienced a significant decline over the past three months, the company's CEO and executives have been consistently purchasing shares, catching the attention of investors. $MKZR's stock price reached around $4.85 in mid-December 2024 before beginning a steep decline at year-end, falling to as low as $1.81 in early January 2025. After a slight rebound, the stock was trading at $1.64 as of March 21, 2025, representing a 66% drop from its recent peak. Amid this sharp price decline, CEO Robert E. Dixon has been aggressively buying company shares this year. According to SEC filings, Dixon has purchased approximately 115,591 shares across 11 separate transactions from mid-January through late March 2025, investing around $240,000. Notably, the frequency and volume of his purchases have increased as the share price has fallen. Executive Christine Elizabeth Simpson has also participated, buying a total of 2,000 shares across two transactions in March at an average price of $1.82. Both executives also have indirect holdings through MPF Successors, LP, suggesting their actual stake in the company may be larger than what's directly reported. These insider purchases are particularly noteworthy when considered alongside the company's current financial situation. $MKZR reported revenue of $23.09 million for the trailing twelve months, but posted a net loss of $19.47 million, with earnings per share of -$1.40. However, the most recent quarterly revenue showed a 63% increase from the previous quarter, reaching $7.97 million, indicating some growth momentum. Perhaps most intriguing is the company's book value per share of $7.04, which is approximately four times the current share price. This suggests the market is heavily discounting $MKZR's underlying assets. The company currently offers an extraordinarily high dividend yield of 28.4%, though with a payout ratio of 285%, raising questions about its sustainability. As a real estate investment company, $MKZR's debt-to-equity ratio of 129.1% is somewhat elevated but not abnormal for the industry. Real estate investment firms typically operate with higher leverage ratios as part of their business model. Analysts view the aggressive share purchases by Dixon and other executives as a strong signal of management's confidence in the company's intrinsic value. With the stock trading at just one-quarter of book value, these insider buys suggest management believes the current price significantly undervalues the company's actual worth. However, investors should carefully consider whether the company's continued losses and unsustainable payout ratio present long-term challenges. Real estate companies are generally facing headwinds from higher interest rates and economic uncertainty in the current market environment. Ultimately, $MKZR's investment appeal hinges on whether it can improve performance and normalize cash flows. While management's buying activity is certainly a positive signal, without improvement in financial fundamentals, stock recovery may be limited. The upcoming quarterly results and any changes to dividend policy will likely be critical factors determining the stock's future direction.

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