SACH

Sachem is a self-managed mortgage REIT making short-term (1–3 year) first-lien hard-money loans to real-estate investors in the Northeast/Southeast. The headline draw is the valuation gap: at $0.95 the stock trades at roughly 0.26x its $3.65/share book value ($175M equity / 48.0M shares). If that book is real, the discount alone is a substantial margin of safety and the core reason this is a hold rather than a sell. The problem is that the price is telling you the market doubts the book — and the filing gives it reasons to.

The business is in defensive runoff, not growth. Revenue fell 11.2% to $57.5M (FY2024) and the MD&A openly describes 'lower net loan originations, portfolio runoff, and the resolution of loans through repayment, foreclosure, or sale' plus compressing net interest margin. FY2024 was a disaster — a -$39.6M net loss and -$17.8M operating income — driven by credit provisioning and loan-sale losses. FY2025 stabilized (net income $6.31M, EPS $0.04), but that is a thin recovery: ROE is only 3.6% and the P/E on those depressed earnings is 23.8, so the stock is cheap on assets yet expensive on earnings power. Management funded 2025 with a $100M Senior Secured Notes issue at 9.875% and by selling its Westport office for ~$19.9M cash and a ~$4M book gain — liquidity actions, not organic momentum. The MD&A flags debt being replaced at rates 200–300bps higher, which structurally pressures the spread this lender lives on.