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Chimera Investments (CIM -2.9%) is downgraded to Underperform at BAML and to Neutral at Credit...

Chimera Investments (CIM -2.9%) is downgraded to Underperform at BAML and to Neutral at Credit Suisse in the wake of its dividend cut earlier this week. Chimera is more exposed to credit risk than some of its mREIT brethren as its portfolio has a higher proportion of non-agency-backed MBS.
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Comments (15)
  • Brian Bobbitt
    , contributor
    Comments (2002) | Send Message
     
    All these geniuses were saying hold or buy yesterday, I could list their names but why. Amazing.

     

    Capt. Brian
    The Lost Navigator
    21 Jun 2012, 10:43 AM Reply Like
  • kdwork
    , contributor
    Comment (1) | Send Message
     
    Poked around Ameritrade and responded to two Zack's recommendations, ARR and CIM. Based on that, bought 10,000 CIM at yesterdays close.
    Can never get the cheese fast enough.
    21 Jun 2012, 04:30 PM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (2002) | Send Message
     
    Second mouse gets the cheese.

     

    Capt. Brian
    The Lost Navigator
    25 Jun 2012, 10:36 AM Reply Like
  • batitude
    , contributor
    Comments (118) | Send Message
     
    The dividend cut being pennies is so overblown in the hype and headlines...

     

    My concerns are the late filings. Most mReits have either had to increase leverage fairly dramatically, or lower the payout. Without the filings, or better explanation of why they are late, makes me wary of the Book Value estimates - would love to buy more below BV - but without a filing that supports the BV - that is where the risk is.
    21 Jun 2012, 10:50 AM Reply Like
  • montanamark
    , contributor
    Comments (1444) | Send Message
     
    18% cut is not pennies + they cut big last year
    21 Jun 2012, 11:40 AM Reply Like
  • sailordude
    , contributor
    Comments (5) | Send Message
     
    The dividend used to be 14 cents now it's 9, that plus the price is down over 30%, bail out, bail out! Or don't, suit yourself, I could not handle the stress CIM gave me.
    21 Jun 2012, 12:00 PM Reply Like
  • lewni
    , contributor
    Comments (6) | Send Message
     
    My guess as to why the filings are late: the former auditors and management did not agree on mark to market valuation of the portfolio. Management wanted a higher valuation than the auditors were willing to accept. The final result in my opinion will be a reduction in book value sooner rather than later
    21 Jun 2012, 11:05 AM Reply Like
  • batitude
    , contributor
    Comments (118) | Send Message
     
    That sums up my worries also - won't be selling, but won't add until I see an audited report.
    21 Jun 2012, 11:21 AM Reply Like
  • Sacristan
    , contributor
    Comments (43) | Send Message
     
    I agree with batitude I will not sell and I will not buy anymore at this stage maybe later on in the year when things clarify. I will add to 2 of our other 3 REIT holdings. In the meantime I will look at one distressed Spanish stock and 3 French Utilities taking a contrarian view Europe. Also watching one Hong Kong stock that is selling far below it´s asset value
    21 Jun 2012, 11:29 AM Reply Like
  • Nessuno
    , contributor
    Comments (178) | Send Message
     
    The housing sector is recovering, interest rates will remain low well into 2014, the spread between the cost of money and the lending rate remains strong resulting in high cash flow.....why all the fuss and why is the share price being battered? Yes, the mortgages are not backed by the government and yes there will be some defaults but the defaults should be within acceptable parameters. The fundamentals are actually improving or should be improving. The late filing is a source of concern.
    21 Jun 2012, 11:48 AM Reply Like
  • sailordude
    , contributor
    Comments (5) | Send Message
     
    Man the lifeboats, eject eject eject! Bail out! Bail Out!
    21 Jun 2012, 11:58 AM Reply Like
  • chopchop0
    , contributor
    Comments (3860) | Send Message
     
    nly or bust.
    21 Jun 2012, 01:17 PM Reply Like
  • jmf3210
    , contributor
    Comments (107) | Send Message
     
    Not adding yet. I need to see the re-statements, read the documents and hear management discussion.
    I always laugh at folks who sleep better knowing somehow a government guarantee of Fannie or Freddie means anything...like, choosing a sailing ship because of its lifeboats. Have you checked out those lifeboats recently?
    CIM has a good niche..selective jumbo mortgage in select regions.The broad picture of American real estate is dozens of little pictures, so don't look at the big picture! CIM isn't.
    But, all this is just sass until we see the 2011 re-statements.
    Actually, I am taking a look at Pennymac (PMT) now that I am risked out on mREITS.
    PMT is some former Countrywide guys who make money the old fashioned way..originating loans, servicing loans, doing loan modifications a la HARP and their own methods, then buying lots of discount toxic stuff from the likes of Citi and...drum roll, please..re-packaging into mortgage -backed securities for sale to those who still dare. That is, if they cannot save the mortgages themselves.
    SO, even with CIM's cuts and troubles things are actually looking up at real estqte ground level..albeit only to a new plateau of historical underperformance and mediocrity, not yet the roaring 00's.
    24 Jun 2012, 07:18 PM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (2002) | Send Message
     
    My lifeboat for CIM [although I sold and took an 11% loss], is it is managed by NLY, of which I still have and may take the ashes from CIM and put into NLY or one of the other ones. I am searching for a good REIT that takes advantage of the coming rental boom. With the current banking [situation], I think loans are going to be hard to get, and lots of borderline people will be renting for a bit more. I have two condos rented, and I pray they stay that way. Our HOA is in difficulty, but in the black as 50% of the owners are not paying their dues. Many HOA's [in our area of Palm Beach County] are not doing well, and perhaps the banking squeeze will send buyers to owners for rentals. I am betting this is happening country wide, and want to scrape a little off the top.
    Someone please find me the proper REIT.
    Thank you.

     

    Happy landlording

     

    Capt. Brian
    The Lost Navigator
    25 Jun 2012, 10:49 AM Reply Like
  • batitude
    , contributor
    Comments (118) | Send Message
     
    You might want to look at Two Harbors (TWO) - they have been a mortgage REIT, but have been buying Rental Real Estate heavily. It may be years before we find out how the cash flow actually and profit from this go toward the distributions - haven't bought any "yet" - still concerned that they could be over-paying for properties, and unsure of what it does to book value and distribution...
    25 Jun 2012, 12:45 PM Reply Like
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