O.K. - AM I missing something:
Annaly - ROA: 1.97%; ROE: 14.96%; Current Ratio: .03; Operating Cash: 14B; Price Book: 1.15
Chimera - ROA: 6.95%; ROE: 19.55%; Current Ratio: .08; Operating Cash: 333M; and Price/Book: 1.03
So, with those financials, the only difference between CIM and NLY is the CAP and the investor concern regarding the low price. AM I missing something.?
yes--with over a billion shares outstanding, CIM is ripe for a 10:1 reverse split, and those almost always erode shareholder value in the long run. A lot of risk here and although the yield seems good, NLY and AGNC have much less risk plus higher yield.
That only the perception which counts in general, but for CIM a reverse split moves the stock to over five allowing some restricted hedge funds to buy CIM, not if lower than 5 or 4 dollars per share, plus margin cost increase at those low stock prices.
Personally, I have faith in NLY management, and expect earning higher, but that is what I though last quarter.
THINK for me to look at facts is CIM is a high yield expected earning relatively flat---I see even a 10% stock as strong yield. What is safe to say without hearing from management?
Seems to me majority of discussion on these mb's centers on "symptoms", i.e., possible div decrease, possible SPO, share price (low level/lack of rise, etc)- when in actuality, these mreits are basically dependent on the real estate "market",which is pretty uncertain (lot of foreclosure talk seems contradictory), and which in turn is dependent on employment (also quite poor right now).
Any thoughts, anyone???
1. Loss on assets of approx 186 million First Quarter
2. Declining dividends last few Quarters
3. Transition to 1/2 Agency Guaranteed assets
leaving 1/2 not guaranteed with default risk
4. Better results with NLY & AGNC with no default
risk. CIM dividend yield too low compared to safer
NLY & AGNC
All adds up to volatility and what reason to own CIM?
CIM has a more favorable ROE and ROA no doubt. However, yield is a key metric, and you did not put that on your list. The yields are very close between CIM and NLY - too close in my view.
CIM takes credit risk and so in my view should yield more the NLY. Right now it doesn't. They need to find ways to growth their payout.
If CIM yields the same as NLY - then what's the point in CIM? Might as well buy NLY.
Also CIM simply does not have the long term track record of NLY and has a clearly less experienced/inferior management team.
CIM also has a history of blowing up their portfolio.
CIM's dividend is dropping and not increasing.
CIM's business model is more complex than NLY's, seems to be changing all the time, and the company does not bother to explain it clearly.
An investor presentation would help!
Having said that - if this name significantly drops below tangible book value I may become interested in re-establishing my position slowly.
other than the fact that one invests in aaa govt guaranteed paper, and the other in subprime and alt-a drek; one takes interest rate risk, the other credit risk; and one has positive duration and the other negative duration--nah, you've pretty much got it all figured out. Good luck with that one.
oHhhh yeah, govt guarenteed paper. Real significant. Ever check out the solvency of Fannie and Freddie? Now one dollar wonders?
Yeah, govt paper has as much protection as a cloud holding up an airplane.
One is genuine dreck, the other, guarenteed genuine dreck.
Yes, the street hates the stock!!! The charts hate the stock!!! The trend is down!!! Everything is blinking YELLOW caution. To ignore the obvious will be a painful
lesson for those who just can't let go.
Just one bit of bad news out of CIM like a cut in the div and your looking at more pain. Too many MUCH better
reits to invest in like NLY, CYS, HTS, IVR, AGNC.