Great Ajax Corp ((RPT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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In the recent earnings call for Great Ajax Corp, the sentiment was cautiously optimistic. The company highlighted significant progress in repositioning and deploying capital, leading to improved financial performance. Challenges remain, such as the stock trading at a significant discount and limited current earnings. However, a strong pipeline and commitment to dividends provide a positive outlook.
Successful Repositioning and Capital Deployment
Great Ajax Corp has successfully repositioned itself by deploying $300 million in commercial real estate assets. This strategic move was accomplished without diluting shareholders, showcasing the company’s ability to raise new capital effectively.
Improved Financial Performance
The company reported a notable improvement in financial performance, with $1.4 million in GAAP income or $0.03 per diluted share. This marks a significant turnaround from a loss of $0.35 per share in the previous quarter.
Strong Pipeline of Opportunities
Great Ajax Corp boasts a robust pipeline of $2 billion in assets, including senior mortgages, subordinate loans, mezzanine loans, and other investments. This positions the company well for future growth and expansion.
Commitment to Dividend and Liquidity
The company maintained a dividend of $0.06 per common share, demonstrating its commitment to returning value to shareholders. Additionally, it holds approximately $100 million in cash and liquidity, ensuring financial stability.
Stock Trading at a Significant Discount
Despite the positive developments, Great Ajax Corp’s stock is trading at about a 50% discount to its book value, with a GAAP book value of $5.37 and a stock price around $2.70. This presents both a challenge and an opportunity for investors.
Limited Current Earnings
Earnings available for distribution (EAD) are about $100,000, effectively zero, indicating limited current earnings. This remains a concern despite the improvements in financial performance.
Forward-Looking Guidance
Looking ahead, CEO Michael Nierenberg emphasized the company’s strategic repositioning and focus on achieving double-digit returns. With a $2 billion pipeline of real estate investments and plans to grow its equity base without diluting shareholders, Great Ajax Corp is poised for future success. The company aims to leverage third-party partnerships for capital and pursue large-scale transactions.
In summary, Great Ajax Corp’s earnings call reflected a cautiously optimistic sentiment, with significant progress in capital deployment and financial performance. While challenges like stock discount and limited earnings persist, the company’s strong pipeline and commitment to dividends offer a promising outlook for investors.