Lument Finance Trust Inc. lftReal Estate Investment Trust (REIT), a New York-based real estate investment trust (REIT), fell to another new 52-week low this week as its price plummeted.
Many REITs are bouncing off November lows, but after Lument reported funds from operations of $0.01 per share earlier this month, selling accelerated.
The company specializes in commercial debt investments “with an emphasis on the middle market multifamily sector,” according to its website. It’s a tough business with the Federal Reserve constantly raising interest rates and the 30-year fixed mortgage rate exceeding 7%.
Lument trades with a price-earnings ratio of just 10 and trades at a 45% discount to its book value. The REIT pays a 12.12% dividend, which may be difficult to maintain during current market conditions. It is traded lightly with an average daily volume of 63,700 shares.
Ahead of its October quarterly earnings report, analysts liked Lument Finance Trust. Raymond James Financial Inc. maintained its outperform rating on the REIT with a price target of $2.75 from $3.25. Piper Sandler Company cut it to neutral from $2.75 with a price target of $2.50.
The daily price chart for Lument looks like this:
What’s a bit odd here is the new low while other REITs went lower weeks ago and have recovered somewhat. That luminance fell further as talk of a Fed pivot began to wane in the financial media. This may have something to do with the very light volumes traded. Institutions held only 48% of the float, a lower figure than the leading REITs on the New York Stock Exchange.
Here is the weekly price chart:
Lument peaked at $3.80 in June 2021 and never returned to that level. Sales ramped up in early 2022 and have never stopped. This is a 50% drop in price, and is not necessarily a good sign that the 50-week MA (blue line) is about to break below the 200-week MA. A positive divergence could emerge on the Relative Strength Indicator (RSI) below the price chart.
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Chart courtesy of Stockcharts