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Newcastle Investment Corp. Message Board

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  • dgmcpa dgmcpa Jan 22, 2013 8:35 PM Flag

    OT: IVR announces

    Bob: What is your valuation of New Residential ? Are only the MSR assets or will Senior Housing be included in New Residential ? Thanks.

    Sentiment: Strong Buy

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    • Here's NCT's assumed valuation, as per their Investors presentation on 1/7:

      NewRes will own the excess MSR business, RMBS, and Non performing loans. NCT values this portfolio at approx 840 million

      NCT will own the commercial Real Estate debt, CDOs and Senior Housing. NCT values this portfolio at approx. 770 million. There are other assets that are not listed and not yet assigned to either company. This information can be found, as noted, on their investor presentation on their website, dated 1/7/13. It's hard to get a handle on true valuation, although they noted that they intend to be very transparent on the assets before the spinoff.. Estimated initial dividends post spinoff , will total 1.04 between them. Hope this helps.

      Sentiment: Strong Buy

      • 3 Replies to bobdbeck
      • Est. dividend of $1.04 @ 8.00% yield = combined share price of $13.00
        Est. dividend of $1.04 @ 9..00% yield = combined share price of $ 11.56
        IMO I think 8.50% is a good target with a total share price of $12.25.

        What is your estimate of the avg. yield? I have approx. 21,000 shares @ basis of $7.50
        so I will probably take some profit

        Thanks you opinion is greatly appreciated


      • Bob, congrats on hanging tough with nct, I am formally Objective11 if you remember me. I had a ton of nct at avg. of 5$ share and got shaken out at 4.50-5.00, big mistake, cost me literally a fortune.My thesis always was that nct would revert to it's historical yield of around 7%, getting close.Euro mess and US debt downgrade second half of 2011 did me in. Also, sold out of cno around 6.50. Both were longterm to boot. If I would have just kept these two stocks not to mention others I got out of at the end of 2011(in large part for tax savings, bad move) I would be loaded. Ouch!

        I put too much weight on the so called experts who said Europe was going to blowup, when in fact the adults in Italy and ECB had finally taken charge. Also listened too much to Derek Pilecki, who said sell when nct got into MSR's...basically was beaten up for six months so sold out, classic mistake.

        Good Luck and enjoy your divies, always enjoyed your posts!

      • I've owned NCT since 2005 and before the crash the average yield was in the 8% range. If it adheres to the past norm and we get the anticipated dividend increases either this quarter or next (I'm ASSuming a .25Q dividend) we should see a combined valuation of somewhere between $12.50-$12.75. I'm comfortable with that as these guys have been reasonably transparent and they have emphasized they will continue to be. Of course Mr.Market will have it's own ideas. All in all I'm glad I had the fortitude to hold onto my original investment during the crash and add enough shares under .50 to bring my cost per share down to about $3.25. The market assigns a very low multiple to NCT so I think there's lots of room to grow with performance.

        Sentiment: Strong Buy

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