Seeking Alpha

New York Mortgage initiated a Buy at UBS

  • New York Mortgage Trust (NYMT +1.4%) is the largest gainer among mortgage REITs in early action after UBS starts the stock with a Buy and $10 price target, noting the firm is well-positioned to benefit from rising rates. Priced in? At $7.75 the stock is trading at 1.2x book value.
Comments (7)
  • rlp2451
    , contributor
    Comments (4856) | Send Message
     
    Any details available?
    21 Mar, 10:21 AM Reply Like
  • John P Ward Jr
    , contributor
    Comments (30) | Send Message
     
    I respect UBS as a financial institution, and they've got some very sharp analysts, but this "Buy" rating is pretty late......the stock has moved from $6.10 per share in Oct '13 to $7.90 per share today......they missed the big move and the capital appreciation dollars have already been made here............NYMT is a terrific dividend payer, and worth owning on that basis, but given their exposure to adjustable rate instruments it was clear back on Sep/Oct that, as the taper tantrum settled in, this stock would move favorably...........now priced at 1.2x book value (a rich level for an mREIT and typically indicative of a good time to lighten one's position not expand it), this may not be a good use of capital tagged for capital appreciation investments (would be OK for capital tagged to generate dividends) relative to other alternatives both in and out of the REIT (mREIT) sector.......UBS missed this one and I think investors need to be careful here trading on the UBS rating...........

     

    Best,

     

    JPW
    21 Mar, 11:07 AM Reply Like
  • rlp2451
    , contributor
    Comments (4856) | Send Message
     
    If it does go to $10, they haven't missed anything. I question what metrics they are using to get to a 30% premium over BV.
    21 Mar, 11:13 AM Reply Like
  • xxavatarxx
    , contributor
    Comments (2219) | Send Message
     
    Me to RLP.
    That just sounds crazy.
    21 Mar, 01:39 PM Reply Like
  • Nostradumbass
    , contributor
    Comments (105) | Send Message
     
    Good analysis, John. I'd love another slug, but not at these prices. Maybe if it falls back to $6.50.
    27 Mar, 10:52 PM Reply Like
  • mapodga
    , contributor
    Comments (1565) | Send Message
     
    It is not only issue if it could go up to 10, but even more if that level is in any way sustainable. Otherwise it is like a trap.
    21 Mar, 04:56 PM Reply Like
  • Ilioula
    , contributor
    Comments (30) | Send Message
     
    I've owned NYMT since 11/2011. It paid compounded dividends for all this time at a price lower than my initial investments. When the stock price moves above nav all newly issued stock is accretive-the higher the price the more accretive. Reits and BDCs both issue additional shares above nav, when they can. So, I'm not really concerned, I'm happy.

     

    This is a very good investment.
    23 Mar, 07:57 AM Reply Like
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