CTO

CTO Realty Growth ($CTO) Signals Bottom with Executive Buying Spree... 8.9% Dividend Yield Appeals

09/11/2025 22:12

CTO Realty Growth ($CTO) is a diversified retail-focused REIT operating a portfolio of high-quality retail properties in growth markets, including notable assets like Carolina Pavilion and Millenia Crossing. Based in Winter Park, Florida, the company also externally manages Alpine Income Property Trust, providing an additional fee-based revenue stream. On September 11th, multiple executives at $CTO made notable simultaneous stock purchases. President John Albright acquired 4,200 shares at $16.53 per share, while SVPs Philip Mays and Daniel Smith each purchased 1,000 shares in the $16 range. This marks the second major coordinated buying spree this year, following a June 26th purchase where four executives collectively bought 7,800 shares. Albright's trading pattern is particularly telling. He sold 29,488 shares near $19.45 in November 2024, realizing approximately $610,000 in proceeds. However, this year he's made two separate purchases totaling 8,000 shares, demonstrating renewed confidence in the stock. This 'sell high, buy low' pattern suggests management has been reading market conditions accurately. $CTO's stock has been struggling recently. After hitting a February high of $19.85, shares have declined consistently and are now trading in a $16-17 range, approximately 15% below the 52-week high. However, aggressive insider buying during this weakness could signal a bottom, as insiders typically have the best understanding of intrinsic value. The company's fundamentals show challenges but also signs of improvement. Revenue increased 13% year-over-year in the first half of 2025, and leasing activity remains robust. The company signed 190,000 square feet of leases in Q2 with cash rent spreads of 21.6%. Portfolio occupancy stands at a healthy 93.9%. While currently reporting net losses, this primarily stems from non-cash charges, as operating margins remain positive at 20.5%, indicating healthy core business profitability. Management reaffirmed 2025 Core FFO guidance of $1.80-1.86 per share and expects a return to profitability by 2026. One of $CTO's key attractions is its 8.9% dividend yield, paying $0.38 quarterly. While appealing to income investors, dividend sustainability remains a concern requiring improved operational performance. Leverage stands at 106% debt-to-equity, typical for REITs. The company maintains a 4.1x fixed charge coverage ratio and $76 million in unused credit facilities, providing adequate liquidity cushion. Analysts maintain cautiously optimistic views with an average price target of $22.75, suggesting 34% upside potential. All analysts maintain 'buy' ratings, indicating professional confidence in the turnaround story. While the retail REIT sector faces headwinds from e-commerce and changing consumer patterns, $CTO's focus on high-quality locations in growth markets provides relative advantages. The company's emphasis on filling anchor tenant vacancies should drive future occupancy and rent growth. The key investment consideration is whether management's coordinated buying signals genuine turnaround potential beyond mere confidence expression. Given Albright's historically accurate timing, current-level purchases could represent meaningful bottom-fishing. However, elevated leverage and dividend sustainability concerns require careful monitoring.