Headquartered in Branford, CONNECTICUT, Sachem Capital Corp (SACH) reports a market capitalization of $87 million, and sells shares at $5.12 in the NYSE American. The company presents its business model with the following words:
Sachem Capital Corp. operates as a real estate finance company. The company is involved in originating, underwriting, funding, servicing, and managing a portfolio of short-term loans secured by first mortgage liens on real property located primarily in Connecticut. It offers loans to real estate investors to fund their acquisition, renovation, rehabilitation, development, and/or improvement of residential or commercial properties located in Connecticut, Massachusetts, Florida, New York, Vermont, and Rhode Island. The company was founded in 2010 and is based in Branford, Connecticut.
With an asset/liability ratio of more than 1x, SACH’s balance sheet looks stable. In Q3, the total amount of assets was equal to $169 million, with total liabilities of $85 million.
The balance sheet shows deferred revenue of $2 million, which I appreciate. Deferred revenue represents a prepayment by the company’s clients that have yet to be delivered. Therefore, the company receives cash in advance of it being earned.
In addition, the price to book value is below 1.5x, which means that SACH is undervalued. Sachem Capital Corp has $169 million in total assets, and $85 million in total liabilities. SACH’s debt to equity ratio is below 2x. Therefore, the debt level is under control. Notice that Sachem Capital Corp reports cash and cash equivalents of $5 million, and net debt of $77 million.
In Q3 SACH reported quarterly sales of $3 million, and positive net income of $2.138784 million. I think that considering the quality of the business, I see room for SACH to grow into its valuation over time.
Disclosure: We don’t own SACH shares.
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