Seeking Alpha

One trader takes advantage of the selloff in mortgage REITs (REM, MORT) to pick up 3 names - not...

One trader takes advantage of the selloff in mortgage REITs (REM, MORT) to pick up 3 names - not mREITs, but brought down simply by association. New Residential (NRZ) - recently spun off from Newcastle (NCT) - has a large portfolio of mortgage servicing rights which actually increases in value as interest rates rise. PennyMac Mortgage (PMT) has a large distressed loan business already with hidden value and that should benefit as the economy improves. NorthStar Realty (NRF) is a "hodge-podge" of commercial lending businesses which could benefit from spinoffs and/or clarification of how certain units make money.
Comments (5)
  • ursf
    , contributor
    Comments (129) | Send Message
     
    Finally somebody who understands NRZ's business model and its way of creating value (and value already created) but it is still not reflected in the stock price. I guess some additional patience will be required. In the meantime, if my calculations are correct it is a 8%+ dividend play.
    26 Jun 2013, 11:41 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5432) | Send Message
     
    And isn't the first dividend July 31st?
    26 Jun 2013, 10:52 PM Reply Like
  • jdunc76
    , contributor
    Comment (1) | Send Message
     
    " NorthStar Realty (NRF) is a "hodge-podge" of commercial lending businesses which could benefit from spinoffs and/or clarification of how certain units make money."

     

    You clearly don't have the first clue of what NRF actually is. Try reading "Misunderstood And Underpriced: NorthStar Realty Finance Is Poised For Outperformance" from Seeking Alpha posted today.
    26 Jun 2013, 12:34 PM Reply Like
  • surfgeezer
    , contributor
    Comments (6808) | Send Message
     
    jdunc-well yeah, he stated he's a trader. They don't need to dig as deep.
    I am both long and playing the trade/price game with options. The 7.50's puts were selling for a better annualized yield than being long. Even have some 10$ in Sept & Dec. fed crud should be distant memory by then
    26 Jun 2013, 04:51 PM Reply Like
  • hanakookie
    , contributor
    Comments (78) | Send Message
     
    NRZ is a good play on rate increases, and the market does not see it till they come out with a dividend to support a price for fair value. But if a comparison is done between HLSS it's closet competitor then it should IMO a yield based wer than HLSS. I point this fact out due to the ratio of leverage between the both. NRZ uses lower leverage even though they have a 20 to 1 MBS portfolio. But it only accounts for maybe 4.5% of potential interest income. And it's non recourse, short duration and less volatile.
    26 Jun 2013, 04:10 PM Reply Like
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