Just finished 83 min. on CC and did the guests have the questions...Education time for the analyst!
I think most of the analyst are looking at all the mortgage companies and laying that on top of TMA, that is, from the questions asked TMA... down to the 2.9 yr swap rate to TMA's cost of funds and a 10% drop in value of homes in California. I think they should say "its a 30% drop from the 60% increase over 2.9 years, netting a 30% increase in home value".
For those who give a hoot, take the time to tune into the CC it's only 83 minutes and you will learn a lot about the martgage business.
Sorry to take so long to get back to you. Busy as all heck.
What a great call. You are correct the analysts are still trying to figure it out. This was an awesome performance from our management team. Also, they clearly formatted the comments to cover the needs of informed individual investors.
All the good stuff has been batted about. It is interesting that although they are doing more hybrid fixed products the effective duration is still short due to symmetrical hedging. Clearly they have a proprietary advantage in their models the analysts are not clever enough to appreciate. Pride goes before the fall for the analysts.
The one negative is the spreads the market offers on new product. I believe they said margins are in the 90 basis point range. While TMA should earn the dividend it is going to put pressure on the mortgage market and other players.
Many MREITs are selling at deserved discounts to NAV. General market conditions; as far as pressure from rates, may get worse. Which means the discounts for many REITs may increase to fire sale levels in the future. Interesting possibilities made possible by stability of the business model.
Hope you picked up some of those long calls when the stock was way down!