Lument Finance Trust (LFT) will be selling a new issue of cumulative preferred stock.
This tiny REIT (a market cap of $94 million) is unknown to me and obviously with a common share price of $3.78/share a deep dive is in order before any purchase of this new preferred issue.
In brief the company finances commercial real estate with an emphasis on multi family properties. They have been in business since 2012 and previously were known as ‘Hunt Companies Finance Trust’.
The preliminary prospectus can be found here.
Yield talk is in the 8% area.
EarlyBird was early on this one.
Is there grey ticker?
Jerry–has not priced yet and no grey market ticker announced.
I think I will take a small flyer on the equity, actually looks very similar to ABR, which loans mostly to multi-family, which I got into early and has been a big winner. Small spec. investment can’t hurt me much, biggest down side I see is the external management. We will see in future how this turns out.
Before they were Hunt, they were Five Oaks Investment. I think a lot of us held OAKS-A and were sad to see it called in 2019.
Anyone else concerned about the percentage of their PFD holdings in the financial sector including REITs?
Not really. About half of my money is for short term trades going wherever I see opportunity and is frequently out of balance. Heavily into those areas where I have the most success and I consider it worth the risk for my active trading style. Diversification is more important for passive investing.
I’m not sure if that’s what you were asking.
If non-REIT financials collapse they could take the whole economy with them. In a perverse way that makes them less risky compared to other sectors. “If we lose, everybody loses.”
If taking a flyer on this, might as well choose the common…pays 9.55% distribution. (which has bounced all over the place since inception in ’13). But, some of the Key Ratios look pretty squirrly, and I don’t like mREITs anyway.
Tim’s advice to proceed with caution is well taken.