BRANFORD, Conn. - Sachem Capital (NYSE:SACH) Corp. (NYSE American: SACH) announced today that it has canceled its proposed debt offering of USD-denominated unsecured, unsubordinated notes that were set to mature five years from the date of issuance.
The company cited the current market conditions, which presented what it considered to be excessive and restrictive pricing, as the reason for the withdrawal, emphasizing the decision aligns with the best interest of the company and its shareholders.
CEO John Villano stated that the company's strong liquidity position, supported by existing credit facilities and a liquid mortgage portfolio, allows it to continue its operations without the need for the now-canceled debt issuance.
Villano assured investors that Sachem Capital will maintain its disciplined approach to underwriting and loan origination, focusing on maximizing risk-adjusted returns and safeguarding capital.
Sachem Capital specializes in the origination, underwriting, funding, servicing, and management of a portfolio of loans secured by first mortgages on real estate. The real estate investment trust (REIT) provides short-term loans to real estate investors, secured by residential or commercial properties, with a conservative loan to value ratio as its primary underwriting criterion.
The press release made it clear that the announcement does not represent an offer to sell or a solicitation of an offer to buy securities and that there will be no sale of the referred securities in any jurisdiction where such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
This move comes as a strategic step by Sachem Capital to navigate the financial landscape, prioritizing the long-term interests of the business over immediate funding opportunities. The information is based on a press release statement from Sachem Capital Corp .
In other recent news, Sachem Capital Corp. reported a revenue increase of 25.5% to $65.6 million and a net income attributable to common shareholders of approximately $12.1 million. The firm has also decided to delist its 7.125% unsecured, unsubordinated notes from the NYSE American exchange, with the notes due to mature on June 30, 2024.
Amid these developments, Oppenheimer revised its outlook on Sachem Capital, reducing the price target to $4.50 from the previous $5.00, while maintaining an Outperform rating on the stock.
These are recent developments that have seen Nicholas M. Marcello appointed as the interim Chief Financial Officer of Sachem Capital. His role will encompass oversight of financial and capital markets activities, portfolio management, investment strategies, among other responsibilities.
Analysts from Oppenheimer suggest that Sachem Capital may surpass their projections if the company's management continues its cautious approach to new lending opportunities and refinances its debt maturities due in 2024. Sachem Capital ended the year with strong liquidity, holding $50.4 million in cash and cash equivalents, and a total debt of $377.7 million.
InvestingPro Insights
In light of Sachem Capital Corp.'s recent decision to cancel its proposed debt offering, a closer look at the company's financial position through InvestingPro data and tips can provide investors with a deeper understanding of its current standing. Sachem Capital, which trades under the ticker symbol SACH, has demonstrated a commitment to maintaining a strong liquidity position, as reflected in its latest metrics.
An InvestingPro tip highlights that Sachem Capital pays a significant dividend to shareholders, with a dividend yield of 17.05% as of the latest data. This is an attractive feature for income-focused investors, especially considering the current market environment where steady income streams are highly valued.
Moreover, the company's liquid assets exceed its short-term obligations, which aligns with the CEO's statement regarding Sachem's liquidity strength and the ability to sustain operations without the need for external debt financing.
From a valuation standpoint, Sachem Capital's market capitalization stands at $121.46 million, with a price-to-earnings (P/E) ratio of 9.61 based on the last twelve months as of Q1 2024. This P/E ratio suggests that the company's shares may be reasonably valued relative to its earnings. The price/book value ratio of 0.51 indicates that the stock might be undervalued, as it is trading at just over half of its book value.
However, it's worth noting that the stock's price movements have been quite volatile, and it's currently trading near its 52-week low. The price has fallen significantly over the last three months, with a total price return of -40.33% over that period. This could represent a potential entry point for investors who believe in the company's fundamentals and are looking for a long-term investment opportunity.
For investors seeking additional insights, there are more InvestingPro Tips available for Sachem Capital at https://www.investing.com/pro/SACH. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an extended list of tips that could further guide investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.