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Fifth Street Finance Corp. Message Board

  • tjdevlin71 tjdevlin71 Sep 15, 2013 5:14 PM Flag

    O/T JMI

    May start a position Monday.A reit( JMI) has been hammered with the others.
    JMI has one of the best multiples out there, trading at three times earnings. For comparison purposes, AGNC trades 2.9 times earnings whereas NLY trades at 3.5 times earnings.
    Pays monthly. (22%)
    It's a hybrid and could be volatile.

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    • OAKS also pays monthly. And they are not ran by the same team that runs Armour like JMI is. However, if you still like JMI and have yet to buy, today is perhaps the opportunity. Just massively cut divi and is down big on the news. If you already bought JMI, my condolences.

    • Be careful here. The company first went public a year ago -- when mortgage rates were at all-time-lows. Their BV will see more hits and they will have to add more hedges to protect themselves. More hedges means higher costs; also repro costs will rise more. All said and done, the "pain" is not over and you will see dividend cuts.

      There are some good hybrid mREITs, but JMI isn't one of them. It's managed by ARR -- which are the same people that destroyed Bimini. Not saying JMI or ARR will end up like Bimini, but I am saying that the mgmt. team is not one that I'd want to invest in. Look at how well they have managed ARR.

      I still own some IVR and TWO, and I now own NRZ (via the NCT spinoff). My positions are modest and I'm prepared to hold these for many years. Other well managed mREITs include MTGE and WMC. Personally, I sold all my MTGE last quarter and I have no plans to get back in anytime soon. These will remain very volatile for as far as the eye can see. If you buy any, I recommend sticking with quality mgmt. team, and be prepared to hold for many years.

 
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