PennyMac Mortgage Investment Trust
PennyMac Mortgage Investment (NYSE: PMT) reported better than expected first quarter earnings on April 23. The remainder of this article will review the latest earnings of PennyMac Mortgage and see whether its closest peers can benefit from the strength in their results.
A quick look at the latest financial disclosures of the company reveals that its reported earnings per share of $0.9 was $0.06 ahead of the more »
The most popular small cap stocks (defined as those with market capitalization between $1 billion and $5 billion) among hedge funds outperform the S&P 500 by 18 percentage points per year on average. We think that this is because small cap stocks receive less attention from the financial media and institutional investors such as mutual funds.
Hedge funds are, therefore, more likely to uncover an undervalued or overvalued stock more »
Compared to the fourth quarter of the prior year, mortgage activity has weakened during the first quarter of the current year. Overall, mortgage applications plunged 8% over the linked quarter and 3% over the prior year. This decline in the Market Composite Index is largely due to an 11% decline in the refinance application volumes, partially offset by a 10% improvement in the purchase volumes compared with the fourth quarter more »
Newcastle Investment (NYSE: NCT) largely invests in non-Agency distressed securities and operates in the United States as a mortgage REIT. The company has investments in real estate securities/assets, including senior living, loans, excess mortgage servicing rights (MSRs) and other real estate related assets.
The recent weakness in Newcastle Investment presents a buying opportunity as I am confident about the company’s fundamentals regarding its excess MSR investments more »
Mortgage REIT Newcastle Investment (NYSE: NCT) reported fourth-quarter EPS that lagged analysts' expectations. While the earnings miss might look troublesome, there may be macroeconomic catalysts that can help the stock outperform in the future.
Newcastle Investment reported its fourth-quarter 2012 performance on Feb. 28. The earnings per share of $0.19 remained $0.09 behind Wall Street's estimate. I feel the earnings miss is nothing to worry more »
New York Mortgage Trust (NASDAQ: NYMT), which has a market cap of just over $350 million, disclosed its performance for the fourth quarter today. The performance remained behind expectation as the EPS of $0.19 remained $0.06 shy of the consensus mean expectation. This investment thesis aims to review the fourth quarter results and see how its diversified portfolio has affected the results.
The Business Model
New York Mortgage more »
A few weeks ago I wrote an article, Two REITs for Your IRA.
That article explains how REITs work and why you should consider investing in REITs.
Since penning that article, I have done a lot of research on REITs. And after starting with well over 100 REITs, I narrowed that list down to ten.
Then I selected four of those to use in this article.
Those four REITs are more »
PennyMac Mortgage Investment (NYSE: PMT) operates as a specialty finance company that seeks to invest primarily in residential mortgage loans. The company has a market cap $1.52 billion and for the purpose of reporting PennyMac is divided into two: Correspondent Lending and Investment Activities. Under its Correspondent Lending function, PennyMac acquires newly originated loans from mortgage lenders, sells them to an Agency or a third party, or pools them more »
PennyMac Mortgage Investment (NYSE: PMT) operates as a specialty finance company that seeks to invest primarily in residential mortgage loans. The company has a market cap $1.57 billion, and for the purpose of reporting PennyMac is divided into two business segments; Correspondent lending and Investment Activities. Under its Correspondent lending function, PennyMac acquires newly originated loans from mortgage lenders, sell them to an Agency or a third party, or more »
A month into 2013, it is becoming apparent that the housing recovery is real and likely to continue. According to a recent Forbes article, the Case Shiller home price index shows prices are up over last year, growing at the fastest pace year over year since mid-2006. Home prices rose 4.5% for the 10-City Composite and 5.5% for the 20-City Composite in the 12 months ending in November more »
Starwood Property Trust (NYSE: STWD) operates as one of the largest commercial mortgage REITs, both buying existing commercial mortgages and originating its own commercial loans. It’s been over three years since the company commenced operations, and since then Starwood has carved out a dominant position in the REITs sector for itself, providing attractive dividend yields and potential for growth. The $3.4 billion market cap company was initially built more »
Formed in 2003, New York Mortgage Trust (NASDAQ: NYMT) operates as a debt REIT which seeks to invest in traditional types of mortgage related investments, such as Agency ARMs and Agency IOs. The company primarily aims to invest in distressed markets like PennyMac Mortgage (NYSE: PMT). However, later on non-Agency residential mortgage backed securities; Agency RMBS consisting of ARM and hybrid adjustable-rate RMBS, multi-family CMBS and distressed residential single family more »
With the available returns lower on Agency mortgage backed securities, I expect 2013 to be a year where the mortgage REITs look to expand their investment opportunity sets. The return environment in 2012 remained very attractive for non-Agency MBS. I remain constructive on the sector because the strong demand from investors in search of yield given ultra low rates, continued improvement in the underlying fundamental performance. Assuming leverage remains consistent more »
QE4 is here to replace Operation Twist and Ben Bernanke has promised an extended easing at a rate of $85 billion a month. The easing is here to stay until the US unemployment rate, which is currently at 7.7%, falls below 6.5%. The new buying program will be purely of Treasury purchases, unlike QE3.
It is widely anticipated that the new easing will add more accommodation to the more »
To stimulate growth in the sluggish US economy, the Fed announced the launch of QE3. QE3 was aimed at particularly supporting the US housing and labor markets. However, the US labor market is still not close to the kind of improvement imagined by the Fed. I believe QE3 will stay even if the financial cliff is averted. Given the situation, I recommend investors stay away from pure play Agency Mortgage more »
The third round of quantitative easing through which the Federal Reserve will purchase agency mortgage-backed securities, although considered a stimulus for the slowing economy, will have a negative impact on certain Real Estate Investment Trusts (REITs). REITs that invest exclusively in agency mortgage- backed securities (MBS) will be the ones that take the worst hit.
However, before we proceed, we should know a little more about REITs.
REITs make direct more »
Stocks with low PEs and good dividend yields are often the best bet for long term value investors. In addition, when these stocks starts picking up momentum they also become well suited for investors with short term investment horizons. The following is a list of three high yield stocks which have seen significant upside in the last 3 months.
Forward Dividend Yield
3 month Returns
Calumet Specialty Products more »
Ben Bernanke recently cheered the market when it was announced that the interest rates in the US would be kept low. The businesses that cheered the most were market liquidity dependent. By keeping the low interest rate environment, the liquidity in the market would allow businesses like mREITs to prosper, and hopefully bring the industry back to its full health.
Mortgage REITs buy mortgages from the market, package them and more »
When Federal Reserve Chairman Ben Bernanke strides to the podium at Jackson Hole in late August to speak, the entire mortgage investment industry should rise up and cheer.
The stock holders for companies in this sector such Ellington Financial LLC, Invesco Mortgage Capital (NYSE: IVR), Anworth Mortgage Asset (NYSE: ANH), PennyMac Mortgage Investment (NYSE: PMT), and CYS Investments (NYSE: CYS) should all join in the standing ovation. Due to Bernanke more »
Chimera (NYSE: CIM) may just be the best bargain in the mortgage real estate investment trust (mREIT) sector. It may also be the biggest risk, because its dividends and share price are modest when compared to more traditional mREITs.
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