NLCP - NewLake Capital Partners: Still Worthy Of A Place In Your Portfolio
2024-06-17 19:01:30 ET
Summary
- NLCP is a triple net lease REIT focusing on properties leased to US-licensed cannabis operators, with 31 properties across 12 states.
- The Company has solid business metrics, negligible debt outstanding, and promising growth prospects accompanying its property sector (incl. a highly favourable supply-to-demand relationship).
- NewLake Capital Partners is undervalued compared to its larger competitor.
- NLCP has potential for double-digit total returns. However, it has some noticeable risk factors that make it a candidate for a small position of a portfolio.
- NLCP is a high-risk - high-reward investment case, but it's worth considering.
Investment thesis
NewLake Capital Partners ( NLCP ) is a high-risk - high-reward investment case that I consider a candidate just for a small portion of my portfolio. NLCP:
- has a high (100%) occupancy rate and solid WALT (14.1 years)
- has healthy liquidity supported by cash position and undrawn credit facility with negligible debt outstanding
- operates within a unique property sector with attractive growth prospects and highly favourable supply-to-demand relationship