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Crexus Investment Corp. Message Board

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  • mullalarmbereitschaft mullalarmbereitschaft Nov 11, 2011 3:18 PM Flag

    FBR Downgrades 2 days after Great Conf Call?

    The first two day reaction as definitely higher.

    The book now 11.92, with inference of higher yet value- AND Higher div.
    Admittedy the Barclays portfoli was 'Lumpy' but seems to have been a Net plus.

    One neg I noticed.
    The Barclays portfolio was bought at 20% disct to face.
    Meaning it it was worth Par/100% the Book value would go up 14% since it's now 70% of the company.
    But the book only went up 2.6% from 11.64 to 11.92.
    Some of the increase may not be realized yet. but some was written down; notable a 60% non-performing chunk.

    There may be other Dead wood in there- but overall some more realized gains and work-outs/sales on the crap.

    PLUS, as of Sept 30 they had ZERO leverage.
    Meaning they can add ALOT more property and increase the div.

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    • Look at the 10Q. Non performing loans total $60MM, not 60% of portfolio. Also, no loss allowance was recorded because collateral is greater than face amount of loan. Book won't increase until discounted loans mature, right? Look at the CS analyst report on CXS. Very positive outperform. Conviction is that CXS should sell at a premium to book.

    • Regarding book value change, remember that 53 million shares (including over allotment) were issued at $11.50, less $0.15 underwriter fee. So each of those 53 million shares at net $11.35 had to be "uplifted) to $11.92, or a gain of $0.57 per share. So, you got a dividend of $.30 and a gain in book value of $.57 over the net proceeds per share. Not bad.


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