Investment Potential: Financial Performance, Portfolio And Growth Of Leading Public Sale-Leaseback Stock In Cannabis
Portfolio Pulse from Nicolás Jose Rodriguez
Zuanic & Associates initiated coverage of New Lake Capital Partners (NLCP) with an Overweight rating, citing its significant growth in net real estate assets from $124 million in 2020 to $375 million in Q3 2023. NLCP, a sale-leaseback stock in the cannabis sector, faces a stagnant AFFO per share but has bought back over $9 million in stock. It offers a 12% dividend yield and trades at a 30% discount to NAV, compared to peers like IIPR, which trades at a 22% premium. NLCP's portfolio includes stakes in Curaleaf, Cresco, Trulieve, and others. The company has low leverage and is well-positioned for growth, with expected federal reforms potentially benefiting the sector.
December 06, 2023 | 12:37 pm
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POSITIVE IMPACT
New Lake Capital Partners has been initiated with an Overweight rating by Zuanic & Associates, highlighting its growth in net real estate assets and a high dividend yield despite stagnant AFFO per share. It trades at a discount to NAV, suggesting potential for price appreciation.
The Overweight rating and the significant discount to NAV compared to peers suggest that NLCP is undervalued, which could lead to short-term price appreciation as investors react to the analyst's positive outlook.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Acreage, holding a 5% stake in NLCP's portfolio, could be impacted by NLCP's performance, but the direct short-term impact on Acreage's stock is less clear.
Acreage's stake in NLCP's portfolio could lead to some investor interest, but the direct short-term impact on Acreage's stock is not explicitly clear from the article.
CONFIDENCE 55
IMPORTANCE 25
RELEVANCE 30
NEUTRAL IMPACT
Ayr Wellness, with a 7% stake in NLCP's portfolio, could be impacted by NLCP's performance, but the direct short-term impact on Ayr Wellness's stock is less clear.
Ayr Wellness's presence in NLCP's portfolio could lead to some investor interest, but the direct short-term impact on Ayr Wellness's stock is not explicitly clear from the article.
CONFIDENCE 60
IMPORTANCE 35
RELEVANCE 40
NEUTRAL IMPACT
Cresco, accounting for 13% of NLCP's portfolio, could be impacted by NLCP's performance, but the direct short-term impact on Cresco's stock is less clear.
Cresco's presence in NLCP's portfolio could lead to some investor interest, but the direct short-term impact on Cresco's stock is not explicitly clear from the article.
CONFIDENCE 65
IMPORTANCE 45
RELEVANCE 50
NEUTRAL IMPACT
Curaleaf, representing 24% of NLCP's total real estate, is a significant part of NLCP's portfolio, indicating that NLCP's performance could influence investor sentiment towards Curaleaf.
As a major part of NLCP's portfolio, Curaleaf's stock could see indirect effects based on NLCP's performance and the analyst's positive outlook on NLCP.
CONFIDENCE 70
IMPORTANCE 55
RELEVANCE 60
NEUTRAL IMPACT
Innovative Industrial Properties (IIPR) is mentioned as a peer to NLCP, trading at a 22% premium to NAV. The comparison suggests IIPR is more richly valued, which could impact investor perception.
IIPR's mention as a more richly valued peer could lead to a neutral impact as investors may have already priced in the premium valuation, but it could also lead to a reassessment of IIPR's valuation relative to NLCP.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Cannabis mREIT (REFI) is mentioned as trading at par to NAV, which could be used as a benchmark for NLCP's valuation and potential growth.
REFI's trading at par to NAV provides a reference point for NLCP's valuation, but the direct impact on REFI's stock price is uncertain without additional context.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50
NEUTRAL IMPACT
Trulieve's 11% stake in NLCP's real estate portfolio could be viewed positively by investors, but the direct short-term impact on Trulieve's stock is uncertain.
Trulieve's stake in NLCP's portfolio could be seen as a positive by investors, but the direct short-term impact on Trulieve's stock is not explicitly clear from the article.
CONFIDENCE 65
IMPORTANCE 45
RELEVANCE 50