Eagle Point Credit Management LLC, a significant stakeholder in ACRES Commercial Realty Corp. (NYSE:ACR), has recently reported selling a portion of its holdings in the company. According to a recent SEC filing, Eagle Point Credit Management sold a total of 12,394 shares of ACRES Commercial Realty's 8.625% Series C Preferred Stock. The sales occurred on October 30 and October 31, with transaction prices ranging from $24.91 to $24.92 per share. The total value of these transactions amounted to $308,834.
Following these transactions, Eagle Point Credit Management still holds a substantial number of shares, with 486,897 shares of the 8.625% Series C Preferred Stock remaining in its portfolio. Additionally, the firm maintains holdings in other securities of ACRES Commercial Realty, including 921,078 shares of the 7.875% Series D Preferred Stock and 1,191,307 shares of Common Stock with a par value of $0.001.
Eagle Point Credit Management, along with Eagle Point DIF GP I LLC, acts as a ten percent owner, managing private investment funds and accounts that hold these securities. The firms have stated that they disclaim beneficial ownership of the securities, indicating that their involvement is primarily on behalf of the funds and accounts they manage.
In other recent news, ACRES Commercial Realty Corp unveiled its Q3 2024 financial results, highlighting a net decrease in its loan portfolio, a dip in earnings available for distribution (EAD), and a slight increase in GAAP book value per share. The company's loan portfolio experienced a net decrease of $134.4 million, now valued at $1.6 billion. They reported a GAAP net income of $2.8 million, or $0.36 per share, and EAD per share decreased to $0.24, down from the previous quarter's $0.51. However, the GAAP book value per share rose to $27.92.
Furthermore, a student housing development near Florida State University, exhibiting high occupancy, is planned to be marketed for sale. Liquidity remained robust at $79 million with a debt-to-equity leverage ratio of 3.3 times. The company also spent $1.7 million on share repurchases, with $2.3 million still available in the buyback program.
ACRES Commercial Realty Corp is strategizing to monetize assets and improve credit quality, with a potential return to a market-based dividend as capital is redeployed. In response to questions from Raymond James analyst Stephen Laws, CEO Mark Fogel and CFO Eldron Blackwell indicated that they are preparing to reinvest in new loans, targeting mid to high teens ROE outcomes despite current market conditions.
InvestingPro Insights
To provide additional context to Eagle Point Credit Management's recent sale of ACRES Commercial Realty Corp. (NYSE:ACR) preferred shares, let's examine some key financial metrics and insights from InvestingPro.
ACRES Commercial Realty Corp. currently has a market capitalization of $112.25 million, indicating it's a relatively small-cap company in the real estate sector. Despite its size, the company has shown impressive performance, with a notable 106.76% price total return over the past year. This substantial gain suggests that investors who held onto ACR shares have been well-rewarded, which may explain why Eagle Point Credit Management still maintains a significant position in the company even after their recent sale.
InvestingPro Tips highlight that ACR has a perfect Piotroski Score of 9, which is a positive indicator of the company's financial strength and potential for future performance. This score, combined with the fact that ACR is trading at a low Price / Book multiple of 0.26, suggests that the stock may be undervalued relative to its assets, potentially offering an attractive entry point for investors.
Another relevant InvestingPro Tip notes that management has been aggressively buying back shares. This action often signals management's confidence in the company's prospects and can be seen as a positive use of capital, especially given the stock's low valuation metrics.
For investors interested in a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide further insights into ACR's investment potential. These additional tips, along with real-time data and analysis, are available to InvestingPro subscribers, offering a deeper understanding of ACRES Commercial Realty Corp.'s financial health and market position.
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