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Anthracite Capital, Inc. Message Board

  • msjmsj2001 msjmsj2001 Jul 3, 2002 11:47 AM Flag

    Risk Reward @ $10.85

    The risk reward at this price is: couldl go down another .85 to a 14% yield, and with a good earnings report from the company later in the month, where earnings are shown to be substantially above the dividend payout (as they were in the first quarter) stock could have a 75 day upside of 3 points.

    You don't want to be short if the company makes an announcement that its outlook for future earnings are extremely positive; such a statement would probably come through a series of analysts numbers which would be "re-guided" by company management based on their ability to invest the CDO proceeds.

    This stock could go up two points in an hour!

    If you think it could gap down I urge everyone to put in some buy orders "lower"; this is NOT a case of a company going down on price in a fundamental context, but a "flow thing" in which 1) profit taking sellers (fewer in this stock at these levels all the time), 2) short sellers act to create a downside "vacuum".

    This is a terriffic environment for long term investing; but a very risky one for day trading.

    And remember one thing, the NYSE specialist for AHR is doing everything he can to find a price the stock at an ever lower pricepoint in which to both 1) "find a new level of stabilization" and 2) "get long himself" in which to trade his own floor position most profitably.

    A "10" handle on AHR is extremely cheap!!!

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    • You are supposed to buy when there is "blood in the streets" like today so I bought more, some a little too soon. I bought my expensive shares today at 12.38% yield. That is still a nice return even if I've lost some of the principal. I bought the cheaper ones at $10.85. Thanks msjmsj2001 for your continued wise posts.

      • 3 Replies to COOLREIT
      • true about the blood on the streets, but theres blood just about everywhere and you have to start asking wheres the best return on my money for the next 12months, and certainly cast an eye on 3 months since thats the next divvy. Some stocks like WM still trade at <10x earnings. If that company merely increases its PE by 1 or maintains the PE and grows at 10%, you have a 13% gain over say a year. If a stock like AHR is looked in a year, I think everyone here wil agree they maintain the div, but perception of rate hike effect (real or imagined) will have a likihood of decreasing priceing so that the return is osmething less than your current yiled, or under 13%. If your taxable, the implications are even a bit more dire. add minimal growth to minila multiple expansion and you get a double wammy as Peter Lynch always alluded to, though I forget his exact term.

        Now im not singling out WM except for the fact I own that too (and more of that than AHR granted), but just as an illustration that buying non-REITs may be a better option than buying certain mortgage backed reits.

        just looking for good companies at low prices and some yield to pocket.

        have a great fourth to all

        And by the way, whie we are all depressed about the recent losses in the reits, just pull up a chart to see that youve lost only a few months of gains, avoided the markets losses and over the past 1-2 years, are still kicking tail. Cheers.

      • AHR @ 10.85. you were also buying @ 13.25..$13...12.75..12.50...?

        Leo

      • Hate to say it but this is trading like someone knows something. In this bear market the information gap between the people-in-the-know and those who don't know is wider than ever. Tread carefully. This market does not forgive miscalculations.