MKZR

MacKenzie Realty Capital ($MKZR) CEO Accumulates 140,000+ Shares Amid 70% Stock Plunge...Trading at Just One-Third of Book Value

03/27/2025 07:36

MacKenzie Realty Capital ($MKZR) CEO Robert Dixon has been catching market attention with his consistent insider purchases over the past three months. These buying activities, occurring amid a significant stock price decline, are sending important signals to investors. The share price of $MKZR has plummeted approximately 70% from $4.84 in mid-December to a recent $1.51. Particularly alarming was the sharp drop in early January, when the stock fell from $3.16 to $1.81 in just one week. Despite this precipitous decline, CEO Robert Dixon has maintained a steady pattern of purchasing company shares. Between mid-January and late March 2025, Dixon executed 14 separate purchase transactions totaling approximately 145,591 shares worth about $275,613. Notably, he acquired 40,000 shares in just one week from January 16-21 at prices ranging from $2.55-2.85, and continued buying in March at even lower prices between $1.55-1.92. Additionally, officer Christine Simpson made two purchases in March totaling 2,000 shares. MacKenzie Realty Capital is a small-cap real estate investment company with a market capitalization of approximately $32.4 million, operating as a REIT (Real Estate Investment Trust) focused on commercial properties. Recent financial statements reveal annual revenue of $23.09 million, but the company is experiencing a net loss of $19.47 million with earnings per share (EPS) of -$1.46. A striking observation is the company's book value per share of $5.07, which is more than three times the current share price of around $1.51. This translates to a Price-to-Book (P/B) ratio of just 0.35, suggesting significant undervaluation from an asset perspective. The company also maintains an impressive dividend yield of 28.4%, potentially appealing to income-focused investors. However, investors should be aware of several risk factors. The company carries $128.6 million in total debt, with only $6.14 million in cash and cash equivalents, resulting in substantial net debt. Additionally, the payout ratio of 285% raises questions about the sustainability of the current high dividend. According to insider trading disclosures, both CEO Robert Dixon and officer Christine Simpson hold additional indirect stakes through MPF Successors, LP, indicating that their economic interest in the company extends beyond their direct share purchases. Real estate market experts are closely monitoring how recent interest rate increases and the commercial real estate market downturn are affecting REITs like $MKZR. While higher interest rates can negatively impact property values and increase funding costs, growing expectations of rate cuts are cautiously raising prospects for long-term recovery. In the current context, Dixon's persistent buying pattern may reflect management's belief that the company's intrinsic value significantly exceeds its current market price. Particularly noteworthy is his tendency to increase purchase volumes as the stock price falls. Since insiders typically possess deeper company information than general investors, such buying signals are considered important investment indicators. In conclusion, the insider purchases at MacKenzie Realty Capital can be interpreted as management's confidence in the company's long-term value despite the current stock decline and poor performance. However, investors should also carefully consider risk factors including high debt levels, continued losses, and the uncertain real estate market environment.

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