No big surprises although the fact that the VIEs are on the balance sheet now makes some eyeballs pop, I think.
They didn't get the capital raises deployed until late in the quarter, which cost a couple of pennies of EPS.
Clearly want to shift from predicting interest rates to analyzing underlying credit and see agency MBS as a place to park cash more than a good return sector (with gross spreads of 1.5%) agencies are a low ROE business at this point. CPR spiked. If there was a disappointing datapoint in the quarter than was it.
They hinted at finding some permanent capital to match with the CMBS. I would love to see an 8 or 8.5% preferred issued here.
Company continues to be 100% about management. Do you believe in the post JMP regime or not. I believe enough to keep a moderate allocation here and believe that the dividend is safe. But this is a "risk on" MREIT more so than most.
I like the co. and the cmbs niche. That said, they missed by more than a "few pennies." Estimates I saw were for $.34 and investment income came in at $.20 with a current dividend of $.27. SPO'S, timing, etc. not good enough - I think we know why. Are you with me or a loyal cheerleader?
Good lord, nobody would describe me as a loyal cheerleader. That's probably the first on a yahoo board.
They raised a third of their current equity base in the last offering and basically got nothing out of it. Although it went into agency initially it will migrate (gradually) into their "risk on" baskets. On $33 ml in equity they should earn NII of around $1.2ml per quarter. That's about eight cents a share, so their run rate net interest income is around twenty cents. The dividend is 27 cents.
They are executing according to plan. When (if) things go bad you won't know if from earnings with a company like this . . . you'll know it from market action.