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Farmland Partners buys back shares, 3 months after selling them

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Farmland Partners revealed a share buyback only three months after raising $46.5m from shareholders, saying the turnaround reflected the unwarranted cheapness of the stock.

The land investment group revealed a $10m stock repurchase programme, to be executed "from time to time, in amounts and prices as the company deems appropriate".

The buyback "demonstrates our confidence in our ability to generate returns that are not reflected by our current stock price", said Paul Pittman, the group's founder and chief executive.

"Repurchasing our shares is a prudent use of our cash and a significant value creation opportunity for the company's stockholders."

Farmland Partners in July sold 3.71m shares at $12.50 a share to raise cash for a land acquisition warchest.

The shares closed last night at $10.36, representing a drop of 17% on the July sale price, although they rose 3.3% on Wednesday to $10.70 in lunchtime deals in New York.

Soaring costs

The announcement came hours after Farmland Partners unveiled for the July-to-September period, its first full quarter since listing in April, earnings of $34,805, down from $169,418 a year before.

While revenues more than doubled to $1.19m, a reflection of a spending spree which is on track to lift its portfolio above 38,000 acres, costs soared too, with general and administrative expenses rocketing above $645,000 from $7,873 a year before, a reflecting of its listing and more active operation.

Adjusted finds from operations reached $0.06 per share, above the$0.04 that investors had expected.

'Pockets of opportunity'

The group, touting "significant growth" during the quarter, also restated an upbeat view of the agricultural sector, contrasting with the more cautious comments this week from the likes of Agco and DuPont, besides a caution from Creighton University of sinking land prices.

"While commodity prices remain somewhat soft, record yields and very strong exports are leading to continued strength in the farm economy," Mr Pittman said.

Within the land market, "we are seeing pockets of opportunity for good transactions across the country.

"In general, high quality farmland continues to hold its value on the back of strong fundamentals and farmers seeking to expand their land holdings."


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