Barclays Reiterates an 'Overweight' on Chimera Investment Corp (CIM); Filing Delay More Benign Than Thought
6:30 am ET 11/16/2011 - Street Insider
Barclays reiterates an 'Overweight' on Chimera Investment Corp (NYSE: CIM) price target of $4.00. Barclays analyst says, "After a delay in the filing of its 10-Q, CIM provided additional disclosure after the close today that we see as a positive development for the stock. Recall that the delay had been caused by the treatment of OTTI related to securities below the AA designation that had previously been evaluated under ASC 320 (investments-Debt and Equity Securities) and were now being evaluated under ASC 325 (Investments-Other - Beneficial Interest in Securitized Transactions).
Although full results are still not available, CIM did provide its 3Q11 GAAP and economic book value, which were at $3.27 and $3.01, respectively. The decline from 2Q11's levels ($3.35 and $3.08) was likely less than the market had expected, and GAAP book value was slightly better than our $3.25 estimate. Since Wednesday's close, when�the filing officially became late (the NT was filed Thursday), the stock has sold off�7.6% vs. a 1.8% gain in the S&P 500. Based on the newly published book values, the stock now trades at less than 0.92x economic book, and less than 0.88x GAAP book value. Additionally, taxable income was $0.13 for 3Q11, in line with the $0.13 dividend and supportive of future payout sustainability (dividends are based on taxable income, not GAAP)."