Farmland Partners (FPI) value opportunity or catching a falling knife?

I like the idea of farming REITs and I currently hold Gladstone Land Corporation (LAND) which invests in land used for specialty crops. I've been looking at adding Farmland Partners (FPI) to my portfolio because it is trading at a 30% discount to its NAV and 35% off its 52 week high. FPI also recently invested $110M into specialty crops in California, which should soon contribute results. However, the market seems very skeptical. I've heard Preston and Stig use the term "catching a falling knife" and I wonder if FPI fits that description, or if it is a good value opportunity? Any thoughts on the company's intrinsic value?

Comments

  • I honestly don't know that much and if it different for REITs or not but from my understanding once a stock has begun to trade sideways/up (even if minimally), essentially stabilizing from it's fall for a certain period of time the "falling knife" would have hit the ground. I would conceive that the appropriate period of time varies from person to person so I can't definitively tell you what that is but in my opinion the knife looks to have already hit bottom on FPI.

    If I am wrong in this assertion I would love to hear why and what rules, guidelines or techniques I could apply in the future to improve on my understanding of this concept.

    Hope this helps.
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