MKZR

MacKenzie Realty Capital ($MKZR) CEO Acquires 125K Shares Amid 65% Stock Plunge – Can Insider Buying Overcome Losses and 285% Payout Ratio?

03/25/2025 16:59

MacKenzie Realty Capital Inc ($MKZR) CEO Robert Dixon has been consistently purchasing significant amounts of company stock over recent months despite the ongoing price decline, drawing attention from investors. The $MKZR stock has shown considerable volatility over the past four months. After reaching around $4.85 in mid-December 2024, the stock plummeted to $1.81 in early January 2025, and has since declined further to $1.64 as of March 21, 2025 – representing a roughly 65% drop from its peak. The stock has largely maintained a downward trajectory over the past three months, raising concerns among investors. Amidst this price decline, CEO Dixon has demonstrated a notable buying pattern. Immediately following the sharp drop, he purchased a total of 40,000 shares worth approximately $105,150 over three days from January 16 to January 21, 2025. Then, about two months later, he increased both the frequency and scale of his purchases, acquiring an additional 85,591 shares worth approximately $155,000 between March 5 and March 25, 2025. Particularly noteworthy is that Dixon's buying activity has intensified in March as the stock price continued to decline. After purchasing 40,000 shares at around $1.85 on March 5, he continued buying even as the price dropped to $1.63 on March 25, when he acquired another 10,000 shares. Another officer, Christine Elizabeth Simpson, also joined the management buying trend, purchasing a total of 2,000 shares on March 5 and March 18. Despite this show of confidence from executives, $MKZR faces significant financial challenges. According to recent financial data, the company recorded a net loss of approximately $19.47 million on revenue of $23.09 million, with earnings per share (EPS) of -$1.40. The debt-to-equity ratio stands at a concerning 129.1%. Investors should also take note of MacKenzie Realty Capital's unusually high dividend metrics. The current dividend yield stands at 28.4%, with a payout ratio of 285%. This indicates the company is paying out nearly three times what it earns in dividends, raising serious questions about long-term sustainability. In this context, the CEO's substantial stock purchases can be interpreted in several ways. From an optimistic perspective, Dixon may believe the current stock price significantly undervalues the company's true worth, or he might have confidence in upcoming business pivots or improvement plans. The company's most recent quarterly revenue showed a 63% increase to $7.97 million compared to the previous quarter, which could be seen as a sign of some business improvement. As a real estate investment company, MacKenzie Realty Capital has likely faced challenges from the high interest rate environment and uncertainties in the U.S. real estate market over the past few years. With growing expectations of interest rate cuts by the Federal Reserve, Dixon may be anticipating a recovery in the real estate market and subsequent improvement in company performance. However, investors should remain cautious about the company's continued losses, high debt ratio, and seemingly unsustainable dividend policy. While the CEO's stock purchases may be a positive signal, risks remain if the fundamental financial health does not improve. It's also worth noting the low insider ownership (0.72%) and institutional ownership (4.88%), suggesting the company has yet to gain significant trust from institutional investors. Dixon's recent purchases might be viewed as an attempt to change this perception. In conclusion, while the consecutive stock purchases by MacKenzie Realty Capital's CEO and executives certainly send a positive signal, they need to be backed by improvements in the company's fundamental financial situation. Investors should monitor upcoming quarterly results, changes in dividend policy, and debt management strategies alongside the executives' buying behavior.

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