Why a Fund Bet Big on FCPT Despite 15% Drop

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Dear Diary,
Today I found myself staring at the numbers, wondering why anyone would invest in a company whose stock has been on a rollercoaster. But here we are: Callodine Capital Management, a Boston-based fund, just put $18.67 million into Four Corners Property Trust (FCPT), even though its shares have dropped 15% this year. Let me break this down like I’m sipping tea and trying to make sense of it all.

What Happened

On November 13, Callodine filed paperwork with the SEC revealing they bought 765,275 shares of FCPT. That’s a pretty hefty stake-$18.67 million, to be exact. It’s their first time holding FCPT in their quarterly report, which feels like a secret handshake with a company that’s been quietly doing its thing. I wonder if they’re betting on a comeback or just hedging their bets with a predictable cash flow.

What Else to Know

This new position makes up 1.64% of Callodine’s total assets. Their top holdings? SPB, WWW, VTRS, OWL, and EQH-names that sound like they belong in a tech startup pitch, not a real estate trust. But FCPT? It’s the quiet cousin at the family reunion, offering 6.3% dividends and a lease agreement that’s basically a contract with your future self.

As of Monday, FCPT is priced at $23.48. That’s down 14.5% from last year, but hey, the S&P 500 is up 16%. So, it’s not a disaster, just a slightly underperforming one. I guess that’s the price of being a niche player in retail real estate.

Company Snapshot

Four Corners Property Trust owns restaurant and retail properties, leasing them to tenants who pay for everything-taxes, insurance, maintenance. It’s like a lease agreement with a side of responsibility. Their revenue? $286.8 million. Net income? $109.1 million. And the dividend yield? 6.3%. That’s enough to make even the most jaded investor pause and think, “Maybe this is the one.”

Foolish Take

Let’s be honest: FCPT isn’t the flashiest name in real estate. It’s the kind of company that doesn’t get headlines but keeps doing its job. In Q3, rental revenue jumped 12%, AFFO per share rose by $0.02, and they collected 99.9% of rent. That’s not a fluke-it’s a system. But the stock? It’s been a bit of a yo-yo. Down 15% over the past year, yet the fundamentals are solid. It’s like a well-maintained car that’s just not as shiny as the new models.

Callodine’s move feels less like a gamble and more like a safety net. Adding a REIT with predictable cash flow to a portfolio full of cyclical stocks? That’s not a bet-it’s a calculated choice. For long-term investors, it’s a reminder that sometimes the boring companies are the ones that age better than the exciting ones. Or, as I like to call it, “The Art of Not Panicking.”

Glossary

Stake: Like a tiny piece of a pie, but for stocks.
Assets under management (AUM): The total value of all the money a fund is handling.
Net position change: When you buy or sell shares, it’s like adjusting your seat in a moving train-nothing stays the same.
13F report: A quarterly confession of what an institution is holding.
Dividend yield: How much money you get back for every dollar you invest.
Trailing twelve months (TTM): A way to measure performance using the last 12 months of data.
Real estate investment trust (REIT): A company that lets you invest in real estate without buying a building.
Net lease: A lease where the tenant pays for everything except the rent.
Reportable assets: The investments a fund has to tell the SEC about.
Annualized: Making a short-term number sound like it’s been doing this for a year.

Units of Financial Anxiety: 3. Hours Spent Researching REITs: 12. Number of Times I Questioned My Life Choices: 5. 📈

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2025-12-30 00:42