Farmland Partners REIT Drops Almost 15% To New Low

Farmland Partners Inc. FPI slumped more than 14% on Feb. 24 after quarterly funds from operations came in less than expected. 

At an $0.18 increase for the fourth quarter of 2022, that’s a drop from the $0.19 gain seen in 2021’s fourth quarter.

The company owns 164,000 acres of farmland in North America and manages another 30,900 acres. According to its website, Farmland Partners is the largest operator of farm properties in the country. As an alternative type of real estate investment trust, it’s sometimes mentioned for investors looking for inflation hedges.

With a market capitalization of $559 million, the REIT is now trading at a 2% discount to its book value. The price-earnings (P/E)ratio for Farmland Properties sits at a hefty 59, significantly higher than the P/E of the S&P 500, now at 21.

The short float for the REIT comes in at 3.48%, not outrageously high but at a level above that of most similar New York Stock Exchange-listed securities. Such a figure suggests a lack of confidence among that group of short sellers.

Analysts at Janney Montgomery Scott upgraded the Farmland Properties in January from Neutral to Buy with a price target of $16. Raymond James, also in January, had maintained an Outperform rating with a price target increase from $15 to $17.

Farmland Properties is relatively lightly traded with an average daily volume of 356,000 shares. 

The company pays a dividend of 2.27%.

The daily price chart looks like this:

The relative strength indicator (RSI) below the price chart shows that the REIT is already into the Oversold level. Note that the 50-day moving average (the blue line) crossed below the 200-day moving average (the red line) in November, a sign of possible trouble for the direction of the price. 

Here’s the weekly chart:

Although Farmland Properties has returned to its early 2022 levels of support, note that it remains above the uptrending 200-week moving average. 

Not investment advice. For educational purposes only.

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