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Resource Capital Corp. Message Board

  • ae_savant ae_savant Jan 18, 2013 5:36 PM Flag


    Seeking alpha has a great article on NYMT as a hedge on the yield curve for REITs.
    Just sharing some info that may be useful.

    You may also want to look at JE (Just Energy) as an alternative sector from which to gain some dividends, it pays monthly.

    I am also looking at FULL, a BDC.

    Most these REITs and BDCs are pretty top-heavy so choosing carefully is the key. A number in my portfolio are topping out and ready for sale so need to spot some undervalued ones for rotation. Any suggestions?

    Still long RSO. Looking good here and a definite hold. Not buying or selling.

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    • NYMT has a debt/equity ratio of over 2100. Isn't that a concern?

    • ae..., sonnen...,
      Just another thought:
      At current prices we could see some more SOs which could also being buying opportunities. Since income is my main objective, I probably won't be selling any of my hybrid-Reits or cReits, even at these levels. (Can't see paying CG taxes when I don need to and then trying to find alternative investments for income at the same yields). I am, however, continuing to reduce my agency REIT holdings (AGNC and ARR), since I think that dividend "cuts" are still likely going forward.
      Again, the best to both of you.

      • 2 Replies to lunco
      • Mortgage rates have now moved up to 3.42% in the face of accelerated Fed purchasing. Translation - the Feds ability to drive these rates down is failing and the Fed is now losing money daily on their purchases and the spreads are rising and not falling. I think we've past the trough and the outlook for REITs is now on the upswing.

        Sentiment: Buy

      • I am with you on that Lunco.

        ARR seems to struggle around $7 and yet I am addicted to the yield. I am in at $6.40 or so and so have some margin to play with. But I am uneasy about it being agency.

        I'd just as soon pick up shares of RSO but at this price it is toppy and am happy holding.

        Looking today at MCGC and again at FULL, but FULL has such low volume - I hate getting in a volume trap.

        I did buy CODI at 15.80 after selling some 2.5k shares at 16.10-20 the other day (before x-div date). Seems a good deal to buy now as it is trading lower. I have a core position at about $14.40 and some 500 shares at 15.80. I hope the 500 shares can be sold before the next dividend as I am aiming for keeping 25% in cash to capitalize on opportunities like SOs.

        IVR did an SO the other day but I stayed away. At $21 I think that is too rich. If it sees below $20, I would buy - not at a price of the pricey SO.

        BTW Wayne, I am not red on all these. I am just seeing them get toppy and thinking safe harbor and stowing cash for opportunities would be prudent. Always appreciate your comments and find you among the best informed investors I have ever encountered on these boards.

        My CODI sale represents this - I had an average cost of 15.90 and waited seeming ages (while collecting the GREAT dividend) for it to get above $16. When it did, I sold 3/4 of my CODI and then bought a small share back in at 15.80 (lower than my previous cost basis). My current shares are averaged at about $15.00 with the 500 shares I bought at 15.80. To me, that is a pretty good exchange given I made some 7800 in dividends off the original lot and sold at a modest gain.

    • ae...
      I also read the SA article and think that I might add to my NYMT next week.
      I have some FULL which has done fine, but I probably will add to my PSEC position on a pull-back instead. My favorite for BDC's is BDCL, a leveraged BDC fund which has done very well for me this year but is too high to buy right now. You are right, the BDC are a little pricy right now so patience is what is needed. Also, I have been buying NMM, a shipping stock. They have long-term leases and run mainly "bulk" ships rather than "container" ships of which there are just too many. Bulk shipping should continue pick up as China does. NMM has a history of increasing dividends which is always a good sign.
      They will be reporting earnings next week on Thursday and so you might wait until then to get more current information on NMM.
      I have a "ton" of RSO and so will not be adding anytime soon but even at $6.00 I think that it is a good "buy", mainly because I think that there will be a dividend increase this March. Even a 1 cent increase will, in my opinion, result in at least a 10% move up.
      Have a great weekend.

      • 2 Replies to lunco
      • I bought BDCL a while back and have added to it after ex-div the a few times and it has done me well. I appreciate that I can be invested in the BDC universe at 2X leverage. My outlook for BDCs in general is positive and even though they are pricy, I don't see them pulling back too far.

      • Lunco, I had owned Navios myself a few years ago. Unfortunately, that was at the time of the 2007-8 crisis where it lost so much of its value. It looks more stable now and is paying a nice divy. Bad memories make me gun shy about old shares that lost 75% in a gale.

        I picked up some JE today and will add and tried to get some FULL but couldn't fill my order at 7.43. Have some 1.3k of NYMT and may add more if opportunities remain scarce.

        Am looking to scale down on TICC @ 11+, PSEC @ 12, FSC @ 11+, CODI @ 16+, BKCC @ 11+, and NCT @ 11+ as they are getting toppy. Just anticipating that this will trim my dividend income by 50% so am on watch for replacements. Also am keen to diversify to other sectors than BDC and REITs which are all finance.

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