Chris Karlin
Deep value, special situations, long/short equity, event-driven

Chimera Investment - Overlooked Housing Play With Substantial Upside

Chimera Investment (NYSE:CIM) is a mortgage REIT that invests primarily in non-agency residential mortgages that are not insured against loss by US Government agencies like Fannie Mae or Freddie Mac. Because they are uninsured, returns are driven by credit risk rather than interest rate risk. Chimera maintains a levered Agency mortgage portfolio for regulatory purposes; its non-Agency portfolio carries minimal leverage and is the primary driver of investment returns. CIM has sold off since Mid-May along with other mortgage REITS relating to interest rate fears and bond market disruptions, yet the economics of its underlying collateral continue to improve. Reward-to-risk has substantially improved at the current price, given the sustained performance of the collateral underlying the mortgage portfolio...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details