Landmark Infrastructure Is No 'One Hit Wonder'

LMRK is anything but a “one hit wonder” as I expect shares to continue to get shelf space. While the MLP structure is somewhat unique to my wheelhouse (in REIT-dom), I consider the growth potential strong, and this stock appears to be a good way for “Average Joe” to gain exposure to Infrastructure.

Summary

  • I’m glad to see Landmark getting more shelf space, and investors should recognize that this MLP has a unique-positioned business model.
  • This merely provides retail investors with a simpler way to own shares, by eliminating UBITI and to simplify state tax filings.
  • There’s another reason I have initiated a position in Landmark, and it’s absolutely not because this company is a “one hit wonder”.

It appears that Landmark Infrastructure (LMRK) did get shelf space when I published an article in mid-July, shares climbed by almost $1.25 per share, from $16.50 to $17.75. Since that time, Mr. Market has become less enthusiastic, perhaps suggesting that the small-cap MLP is just a “one hit wonder”.

Here’s how I summed it up in my last article,

“Landmark Infrastructure may soon get the shelf space it deserves. By forming a REIT subsidiary, the company will open the doors for dedicated REIT investors to tap into the growing demand of wireless communication, outdoor advertising, and renewable energy.
I can now see why I have received positive emails from so many readers and subscribers, and I can definitely see this sleepy little MLP becoming the next Realty Income... (remember, the lowest cost of capital is essential in the net lease sector).”

I’m glad to see Landmark getting more shelf space, and investors should recognize that this MLP has a unique-positioned business model. On a recent earnings call, LMRK's CEO, Arthur Brazy, explained that "to complement our core business, the Partnership has taken some major steps to simplify certain tax requirements that affect unit holders and has expanded its business strategy to take advantage of certain market opportunities."

He went on to explain that LMRK has proposed changes to its legal structure that contemplates moving the Partnership's assets under a subsidiary that is intended to be taxed as a REIT. Brazy said that:

“we decided to make this change based on feedback from our investors, and it's specifically designed to broaden our investor base by substantially eliminating unrelated business taxable income, otherwise known as UBTI. It also significantly simplifies state income tax filings for the unit holders.
With this change, we are not eliminating the Partnership structure since that will continue to give us operating flexibility. But we do believe the change to our legal structure will be greatly beneficial to both our existing and new unit holders, and we anticipate the new organizational structure will be implemented shortly after the Partnership holds its special meeting in the third quarter of 2017.”

This merely provides retail investors with a simpler way to own shares, by eliminating UBITI and to simplify state tax filings.

However, there’s another reason I have initiated a position in LMRK, and it’s absolutely not because this company is a “one hit wonder”.

The Overview of Assets

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