Farmland Companions REIT Drops To New 2022 Lows

Is farmland an inflation hedge? The homeowners of Farmland Companions Inc. (NYSE: FPI) most likely assume so.

Sadly for them, it’s not understanding proper now as the actual property funding belief (REIT) dropped from $16.25 in April to its present worth of $12.59. That’s a 22.5% loss in simply 5 months — greater than the inflation fee, annualized or in any other case.

Farmland Companions owns what it describes as “high-quality North American farmland” and offers loans to farmers secured by farm actual property.

The corporate owns about 155,000 acres in 16 states, together with Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia.

Farmland Companions oversees 26 crop varieties and has greater than 100 tenants.

An insider just lately purchased inventory within the firm: Thomas Heneghan, a director of the agency, picked up 708 shares. The purchases have been made at $14.10 per share, on Sept. 23. That’s not that many shares when you think about that his complete possession of Farmland Companions now involves 1,335,383 shares.

The REIT pays a 1.86% dividend.

Right here’s the day by day worth chart for Farmland Companions Inc.:

This week, the REIT undercut its June and July lows at simply above the $13.25 stage, a earlier space of shopping for assist. With that stage violated, sellers clearly have taken management, which isn’t a very good signal. It might be a optimistic signal that consumers confirmed up on Sept. 27 on the $12.25 space and that the relative power indicator (RSI), under the chart, is now signaling oversold.

See additionally: This Little Identified REIT Has Produced Double-Digit Annual Returns For The Previous 5 Years

For a barely longer-term view, right here’s the weekly worth chart for Farmland Companions:

The image right here is gloomier as each the relative power indicator and the shifting common convergence/divergence indicator are exhibiting damaging divergences in regard to cost. If Farmland Properties continues to unload, it seems as if the subsequent stage of assist could be the Jan. 22 low of $10.50.

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Rate of interest hikes made by the Federal Reserve are felt on this sector because it’s probably fewer loans will likely be made due to increased mortgage charges. Underlying property values would possibly cease rising as fewer purchases of farmland develop into the expectation.

Learn subsequent: New Farmland Funding Providing For 390-Acre Forage Crop Farm In Idaho

Charts courtesy of StockCharts

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