If its ok ,,,,,i would like to make a prediction on this stock. First,,, a disclosure,,,,,i own alot of this stock so bias is inherent.
I see CIM as a unique opportunity to invest in the aftermath of the "real estate bubble'. This will probably never happen again in my lifetime. Yield spreads are favorable and likely to continue thru 2011 IMHO,,,,Share price is depressed for good reason but overdone ..
CIM is buying paper at big discounts(this is unlikely to happen again for a long time.
We are going to continue to recieve a huge dividend and I believe 30% appreciation in share price is not unrealistic by year end.
Feel free to give me crap if I am wrong at year end.
THIS IS NOT A BUY RECOMMENDATION. I post this for entertainment value only. Do your own DD.
Folks, where is it written that a company must report earnings on a fixed date?? Stop reading what isn't there. Nothing is implied by a variable earnings date. And a slight benefit might be that it keeps nasty traders from playing with the stock price.
You nailed it. Predominant portfolio is deeply discounted RMBS. Refinances provide windfall profits due to full principal payback that was purchased at a discounted price while "mark to market" value of portfolio increases as housing markets and economy improve. Double dip recession believers or followers of Gary Schilling probably don't want to play CIM.
I'm new to CIM, so let me make sure I understand your post. When you write:
"CIM has a 'scratch and dent' persona to their portfolio which provides great opportunities for refi's as well as upgrades in carrying value as the housing market improves..."
Do mean that CIM actually holds -- what? -- actual residential and commercial mortgages that they refinance? That doesn't sound at all plausible. You must mean that they hold securitized non-agency-backed residential and commercial mortgages that, as those mortgages are refinanced and revalued, rise in value and the real estate markets improve.
Agreed, I should know all this before having bought CIM, but I would appreciate nonetheless your clarification of your comment. Thanks.
I never want to disagree with the fish because I enjoy reading your analysis. However, I feel strongly that earnings will surprise because this isn't a "normal" MREIT. Agency backed paper is not predominant with CIM as it is in other MREITS that just play the spread game. CIM has a "scratch and dent" persona to their portfolio which provides great opportunities for refi's as well as upgrades in carrying value as the housing market improves. Remember the Case Shiller Home Price Index went UP last month which means the value of all MREIT portfolios increased. However, CIM would increase more on a percentage basis because of the deeply discounted mortgages. Was it Bob Grant that wrote "more risk, more reward" That's CIM. GL. Darswan
By my calculaations, at todays price of 3.86, can expect fairly safe divident rate of 15-16% going forward (down slightly from current 17-18%. CIM right now better investment than NLY which I calculated forward dividend rate of 12-13% max going forward at todays price.
Look at how the first quarter GDP was revised a full percentage point up from 2.7 to 3.7! What kind of revisions can you expect? And market participants react so violently to these constantly revised data! It is insanity! But hey, that is what investment so much fun. You get so many chances to prove you were right in your thinking as stocks bounce around!!
I 100% agree. I would rather any company take their time and calculate their earnings accurately, and possibly with a day or 2 delay in announcing them...........
Than one that "rushes" to publish their earnings, only to have to reinstate them at a later time.
It's all about the creditability of the numbers!!!
How often do people get upset when out government is constantly revising unemployment and/or GDP numbers?? And all the numbers are probably lies, anyway! :-)
What's different with CIM? The MREITs which have mostly reported disappointing earnings have 100% or nearly 100% agency portfolios. CIM has only about only 15% agency paper in its portfolio. CIM is more like those MREITs which buy distressed paper at a big discount plus it has been doing a little bit of commercial loans like the BDCs.