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The mREIT (MORT +1.6%) sector gains with sliding averages always good for creating a bid for the...

The mREIT (MORT +1.6%) sector gains with sliding averages always good for creating a bid for the sector, and as the industry continues to present en masse at the KBW Mortgage Conference (earlier). The gist: It's clearly been a bad year for mortgages (see WMC presentation, page 7), but spreads are far wider now than they were several months ago (when the bear case was spreads were too narrow). Buyers of mortgages now are getting far better pricing. Leading are Two Harbors (TWO +3.5%), (presentation), Chimera (CIM +2.7%), Ellington (EFC +1.9%), (EARN +0.1%), (presentation), PennyMac (PMT +3.9%), (PFSI +0.5%).
Comments (1)
  • Ellington is a very different animal than the mReits and shouldn't be included with the group, nonetheless they still get basted with the same brush, despite the fact that they carry considerably less leverage and are able to hedge their positions. On their past conference call, Vranos & Co. discussed their strategy of capitalizing on the anticipated volatility coming from the next Bernanke wobble. It remains to be seen however when investors will begin to understand the differences and award EFC an appropriate premium.
    4 Jun 2013, 04:16 PM Reply Like
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