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Five Oaks Investment Corp. Message Board

  • insidethink insidethink Aug 14, 2013 2:48 PM Flag

    Why big sell off today?

    Any bad news?

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    • No sir. Just a very small float. The lack of liquidity can exaggerate any movement - selling pressure or buying pressure. It has been "priced" at a discount to book of 15.76% (or -15.76% premium depending on you label things). If you back out the recent dividend, assume no positive change in BV from coupon payments and/or appreciation - then its 12.93 (Q2 BV) minus .16 = 12.77..

      If an assumption of 12.77 BV is made, then its -14.32% - which is slightly better than the median of it's peers. Better as in, larger discount.

      If 12.93 is the BV.. and it continues to pay out a .16 monthly distribution. That is a 14.85% yield on 12.93. Which might be tough. I forgot the #s for leverage and net asset yield.. But perhaps this may be pricing in a small cut to dividend.. Who knows.

      Anyways, a good amount of the float is owned by a single, 'buy and hold' entity, XL investments. Thats a good thing, it means the majority of the shareholders will keep a cool head and the stock will move less upon emotion. Meaning, only moving on the facts - not whether or not REITs are IN or OUT, etc etc.

      I haven't checked the 'gossip column' aka news of Yahoo for any BS motley fool or whatever articles.. and if thats the reason.. It usually doesn't last. 95% of the time there is nothing tangible stated in said articles.

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