in fact with this high of a dividend - even if it gets cut a bit in the future - it buys a lot of patience. I can sit and collect a dividend along the way and wait for the price to recover which it will eventually.
I am not crazy worried about it since it is cyclical like this but was trying to get some insight. i actually added 4000 more shares in the 6.24 average range and will add some more. I think the comments that this is a light trading day and the panic sellers are pushing down is true. The dividend yield at this value is crazy - if it holds up for a while. I would predict this will bounce back up to 6.45 over the coming weeks and then maybe back to 7 in the late fall. on the chart there are only a couple of times a year to get in at this level and i missed it the last time. not going to this time.
Sentiment: Strong Buy
Is anyone watching the volume? Last drop like this was around 8 mil shares traded, at this writing, it's only around 2mil......with the new shares issued, does this react the same way as a typical business? ie: more shares, less EPS per share? The logic behind issuing more shares is to invest & get return for a REIT, correct? so ultimately, if the book value was $6.50'ish last I checked, if they do their job properly, the book value should increase... or am I not seeing this correctly.
Can someone educate me? I've been reading many articles on how NYMT will actually profit from an increase in interest rates. So this stock seems that it would be a buy wouldn't it at these levels?
interest rates in theory can squeeze nymt due to the leverage they use on their loans. they take 1$ from you and then borrow 3$ from a bank. that makes your investment holding 4$. if the 3$ gets double expensive - ie it goes from 1.5% to 3% then the net effect to your return is a decrease of 6%. that is significant and a move like that can happen. nymt will have to be looking at this and making sure they have the correct horizon on their loaned money vs their borrowed money.
WASHINGTON (MarketWatch) — Here is a roundup of reactions from analysts to Friday’s jobs report that showed the U.S. added a better-than-expected 195,000 jobs in June and that the unemployment rate was unchanged at 7.6%.
• “A stronger-than-expected employment report - more than strong enough to keep the Fed on track for tapering in September.” — Jim O’Sullivan, chief U.S. economist, High Frequency Economics.