MKZR

MacKenzie Realty Capital ($MKZR) CEO Buys $318,000 in Shares During 77% Stock Collapse - Confidence Signal or Red Flag?

04/03/2025 21:54

MacKenzie Realty Capital Inc ($MKZR) CEO Robert Dixon and key executives have been consistently purchasing company shares over the past three months despite the declining stock price, drawing significant investor attention. $MKZR, a small-cap Real Estate Investment Trust (REIT) headquartered in Moraga, California, has experienced dramatic price volatility over the past six months. After reaching $4.69 in mid-December 2024, the stock price plummeted in early January 2025 and has continued its downward trajectory, currently trading around $1.40. This represents approximately a 77% decline from its 52-week high of $6.07. Despite this downward trend, CEO Robert Dixon has steadily acquired company shares between mid-January and early April 2025, making 16 separate purchases totaling 165,591 shares worth approximately $318,000. Notably, the frequency and volume of purchases increased as the share price declined. Dixon acquired 25,000 shares at $2.85-2.55 in mid-January, then became more aggressive with his purchases when the price fell to the $1.80 range in March, and most recently added 20,000 shares at $1.43 on April 3. Another company officer, Christine Simpson, also made three purchases during this period, acquiring a total of 2,500 shares worth about $4,310. She bought 1,000 shares at $1.85 on March 5, another 1,000 shares at $1.78 on March 18, and most recently, 500 shares at $1.36 on April 1. According to insider trading disclosures, both executives also have indirect ownership through MPF Successors, LP ("MPF"), with each deemed to beneficially own an additional 9,935 shares of $MKZR. This indicates the management team holds complex stake structures in the company's ownership. These persistent insider purchases are particularly noteworthy given $MKZR's current financial situation. The company reported $7.98 million in revenue for the most recent quarter, a 63% increase from the previous quarter, but still recorded a net loss of $4.93 million. Over the trailing twelve months, MacKenzie posted $23.09 million in revenue with a net loss of $19.47 million, resulting in earnings per share (EPS) of -$1.40. Another significant feature of $MKZR is its high dividend yield of 32.3%. The company recently announced a dividend of $0.05 per share, scheduled for payment on April 25. However, the payout ratio of 285% suggests this high dividend may not be sustainable. Additionally, a debt-to-equity ratio of 129.1% adds to the company's financial burden. From a technical analysis perspective, $MKZR currently shows an RSI of 21, indicating oversold conditions, with negative signals from both short and long-term moving averages. Weekly volatility stands at 26.7%, significantly exceeding the REIT industry average of 3.8%. The REIT sector currently faces overall challenges due to the interest rate environment and uncertainties in the commercial real estate market. Smaller REITs in particular are experiencing increased pressure from rising funding costs and liquidity constraints, which impacts the performance of companies like $MKZR. Continuous share purchases by insiders are generally interpreted as a signal that management holds a positive view of the company's long-term prospects. In particular, CEO Robert Dixon's pattern of acquiring more shares as the price falls suggests he believes the current stock price undervalues the company's intrinsic worth. However, investors should also consider various risk factors, including the company's ongoing losses, high debt ratio, and seemingly unsustainable dividend policy. Evaluating how much the stock trades at a discount to Net Asset Value (NAV) is also an important consideration in REIT investments. $MKZR currently represents a high-risk, potentially high-reward investment profile in the market, and despite management's continued purchases, improvements in the company's financial situation and sustainable profitability will likely be key factors in investment decisions.

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