Guys look, CIM div was not real inticing (competitive) to begin with so the drop in div was the kiss of death. The real question is why is the DIV low compared to other MREITs? Lower leverage? Greater management fees (or read that NLY sapping profits)? Hedging strategy? Bottom line is if CIM yeild was comparable to what ARR, AGNC, CYS ... it would be right up there with the rest of them ... low risk factors would be a bonus.
When everyone waited for AGNC's spo its p.p.s. stalled somewhat. After AGNC's spo it recovered nicely. I think that there are potential CIM buyers waiting for the inevideble(?) spo. The sooner it is done, the more sidelined buyers, some of who might had sold at < or > 4.30, to get back in. The lower it goes now the lower the spo. just might be. The spo. probably should have been offered somewhere between the last ex-date 3/31 and the pay date 4/28. Waiting at this point is not helping matters any. If the company is any good the spo is all accretive anyway, SO JUST DO IT and CIM climbs back to 4.10 and above short term.
I added shares of AGNC around the last spo. for 28.4, AGNC is now over a buck higher. I own both CIM and AGNC. Believe it or not, there is talk of even another spo. discussed on AGNC's board. By not having the spo. soon at CIM, we will miss out over here.
Don't listen to these BOZO's...Cim's recent report from 2 days ago raised Gov't back securities to 25% of Total & spread's are actually wider than ever. Average rate went down from 4.5% paper to 2.7%.... Do your own due diligence...READ THE REPORT MoMo...
I understand about the credit risk, but what about leverage? CIM does not use any leverage while NLY and AGNC do (as much #$%$1). Does that imply when interest rates rise (which won't happen this year for sure), CIM would weather the storm better than NLY and AGNC?
Could it also be that their NAV has declined and spreads are shrinking, unlike many of the other mreits, both agency and hybrid? TWO and MFA both grew book value last quarter, while CIM's seems to be consistently shrinking. I sold my position after a quick glance at the earnings report and shifted it all into MFA (not cigarettes and beer, LOL) which looks to me like a better bargain.
I think the low share price of CIM attracts a different kind of investor than NLY or AGNC. Some CIM investors are content with holding and capturing the dividend, but others are selling evertime the share price rises 3 cents, foregoing dividend for short gains in capital. Everytime share price gets righted, there is this giant sucking sound of the day traders heading to the beer store for a six pack and carton of cigarettes.
Your right there, the low share price attracts the quick buck folks however a big increase in share price is unlikely, so eventually they move on causing an up and down effect to CIM. It will eventually even out.
"Everytime share price gets righted, there is this giant sucking sound of the day traders heading to the beer store for a six pack and carton of cigarettes."
What an image for CIM!! Ha, ha, ha. I laughed out loud. Thanks for the smile.