Phiwath Jittamas Acres Commercial Realty Corp. (NYSE: ACR ) is a commercial real estate lender REIT. The company’s book fully comprises commercial real estate held through heavily leveraged securitization vehicles. ACR trades at a deep book value discount, with a P/B ratio of 0.2x. This discount exists because the company operates in the riskiest real estate lending segment (commercial real estate) and carries enormous leverage. Similarly, ACR trades at a low P/E ratio of 3x, but this ratio does not account for millions in preferred share dividends. The company generates much smaller income attributable to common shareholders when preferred dividends are accounted for. The current discount on ACR’s book value is justified by its enormous risk. A simple analysis of its loan book quality reveals that the company’s equity could be severely impaired. Further, its board of directors has not shown an ability to manage risk, with the company writing almost $200 million in losses in 2020. Going further, ACR lost 92% of its value in the GFC. I believe ACR’s common stock is not an opportunity for these reasons. Note: Unless otherwise stated, all information has been obtained from ACR’s filings with the SEC . Business description Leveraged […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
