PINE

Alpine Income Property Trust ($PINE) Executive Buys $50K Shares, 7.78% Yield Despite Debt Concerns

08/15/2025 22:47

Alpine Income Property Trust ($PINE) is drawing attention after Senior Vice President Daniel Smith purchased 3,500 shares with personal funds on August 6, totaling $49,356 at an average price of $14.10 per share. Alpine Income Property Trust is a small-cap REIT that owns 134 commercial net lease properties across 35 U.S. states. The company operates a business model focused on stable rental income through long-term net lease contracts primarily with retail tenants. Net lease arrangements require tenants to pay all operating expenses including property taxes, insurance, and maintenance, providing REITs with predictable cash flows. Smith's purchase is significant for several reasons. First, it represents a senior executive who knows the company's internal situation best investing personal capital. This contrasts sharply with Director Andrew Richardson's consistent selling from September 2024 through February 2025. Richardson disposed of approximately $130,000 worth of shares across seven transactions, primarily converting director compensation shares to cash. Smith's purchase appears to be purely investment-motivated, particularly noteworthy given the timing at a 20% discount from the August 2024 peak of $17.80. This signals strong confidence from management. Indeed, $PINE's recent price action shows a declining trend since mid-2024. After rising from $14.40 in June to $17.80 in August 2024, shares have consistently weakened and currently trade around $14.60, representing approximately 15% decline year-over-year. The stock's underperformance reflects the company's challenging financial situation. As of mid-2025, Alpine carries a debt-to-equity ratio of 142%, indicating substantial leverage. The company has reported net losses for four consecutive quarters, with diluted EPS at negative $0.06. First quarter losses of 8 cents per share worsened from 2 cents loss in the prior year period. However, several positive factors emerge. Revenue growth remains solid, with first quarter revenue of $14.21 million up 14% year-over-year and annual growth of 19%. This reflects portfolio expansion and rent increases. Operating margins remain healthy at 29.31%, suggesting losses stem primarily from high financing costs and depreciation rather than operational issues. Operating cash flow of $25.74 million demonstrates the core business generates positive cash flow. The most attractive element for investors is the 7.78% dividend yield. While the current payout ratio of 1,400% means dividends cannot be covered by net income, the company maintains distributions based on stable rental income and cash flows. This reflects REIT accounting characteristics where large depreciation charges reduce net income below actual cash generation. At current levels, $PINE trades at a 10% discount to book value of $16.24 per share. The price-to-book ratio of 0.90 indicates undervaluation relative to asset value, and the discount may be larger considering real estate assets are conservatively valued on balance sheets. Investors should note key risks. High leverage could increase interest burden if rates rise, and retail tenant difficulties could lead to higher vacancy rates. Questions also remain about dividend sustainability at current levels. Positively, parent company CTO Realty Growth consistently purchased Alpine shares during June-July 2024, acquiring approximately $370,000 worth of $PINE stock through subsidiaries. This suggests parent-level recognition of Alpine's value. Overall, Smith's recent purchase provides a strong signal that management trusts the company's long-term value despite current financial difficulties. Combined with the high dividend yield and discounted valuation, this may represent an interesting opportunity for dividend-focused investors willing to accept the associated risks.