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Invesco Mortgage Capital Inc. Message Board

  • ldk139 ldk139 Aug 18, 2011 2:37 PM Flag

    Best Buy opportunity ever

    Why?
    1) This has a 22% yield. Where else can you find this yield ?

    2) Remember, the SPO priced at 18.37 according to today's news.

    3) IVR's business model is the best, especially during this current slow growth economic environment.

    4) The Fed has made the interest rate about zero for the next 2 years at least. That gives IVR a very stable beneficial environment for at least 2 more years.

    5) IVR's share offering is a good thing, not a bad thing. Why ? Because IVR will immediately deploy the money it gets to purchase mortgage securities, and by taking advantage of a leveraged approach, IVR can generate the same rate of return , if not higher, as its old money.
    Please note, IVR business model is different from , for example, a pharmaceutical company. A pharmaceutical company may in many cases take months or years, if not longer, to get the real result from the money it raises through a public offering of shares.
    But mortgage REITs like IVR will be able to generate immediate money returns on a leveraged basis by deploying the new money to buy mortgage securities right away and generate yields from the new money as well as the old money. That is why almost all mortgage REITS are raising money through share offering like crazy.
    So there is no need to worry about a second or third offerring of shares. The more shares it offer, the more financially strong and stable the company will be, and the more benefits for its shareholders.


    5) IVR's portfolio is more diversified than some other REITS. This may not be a bad thing in this environment, but may be a very good thing. Please refer to IVR management discussion area on its web site.

    6) Again, over 20% yield at this price. What other sector can give you this yield ?


    Disclaimer:
    This is personal opinion, which may prove to be right or wrong.
    You must use your own judgement and consult your own advisers before buying or selling stocks.
    You must NOT believe in my posting blindly.
    Trading stock is itself a risky thing. Especially at this voliate time.
    I have no money to buy. I am just learning to air my view of things.

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    • Just a cautionary note.

      Not only do they invest in mortgage paper, they try to beat the market by trading hedges and swaps.

      If they bet the wrong way, they lose a lot of money, which lowers the book value (the reason they lost over $1.00/share of BV in the last month alone.) Some speculation is that's why they had to do another SPO so quickly after the last one.

      If they continue to gamble and lose, the investment is worthless. Hopefully they will learn from their mistakes and quit trying to beat the market, and invest in real assets instead.

    • you are right.

      i am also waiting for CYS to do an offering.

 
IVR
17.20-0.04(-0.23%)Jul 11 4:02 PMEDT

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