Thu, Apr. 30, 3:15 PM
- A big rise in interest rates early in the session made for a good excuse to sell REITs, but - with the averages sharply lower - rates have reversed course. Still, the sector can't catch a bid, with many of the bigger names down way more than the broader market.
- Equity REITs: Realty Income (O -2.3%), Health Care REIT (HCN -3.2%), Ventas (VTR -3.2%), HCP (HCP -3.1%), Equity Residential (EQR -2.6%), Silver Bay Realty (SBY -2.5%), General Growth Properties (GGP -2.4%), Retail Opportunity (ROIC -3.9%), Boston Properties (BXP -2.4%), Hospitality Properties (HPT -2.9%)
- Mortgage REITs: Armour Residential (ARR -5.6%) - which reported another weak quarter overnight, Two Harbors (TWO -1.1%), Western Asset (WMC -1.3%), Arlington Asset (AI -2.8%), PennyMac (PMT -1.5%). When things get tough, money does have a tendency to flow into the sector giants though: Annaly Capital (NLY -0.4%) and American Capital Agency (AGNC +0.3%) are notable outperformers on the session.
- ETFs: IYR, VNQ, DRN, URE, REZ, SCHH, ICF, SRS, RWR, KBWY, DRV, REK, FRI, FTY, PSR, FREL, WREI
Mon, Apr. 6, 10:35 AM
- Industry book values fell on average 1.5% from 2014 Q3 to 2014 Q4, but - by Credit Suisse's (presumably Douglas Harter's) estimation - they rose an average of 0.5% from Q4 to the end of 2015 Q1. The average discount to book value for the sector would then be at 10.8%, with an average yield of 12%.
- While these are attractive numbers, mREITs still face a "challenging operating environment," says Credit Suisse, thus leading it to favor players building out operating businesses which can create their own investments. The team's top three picks: PennyMac Mortgage (PMT +1.1%), Starwood Property (STWD +0.7%), Two Harbors (TWO +0.2%).
- ETFs: REM, MORT, MORL
Tue, Mar. 24, 4:32 PM
Tue, Mar. 3, 8:05 AM
- Altisource Portfolio Solutions' (NASDAQ:ASPS) contract is with Ocwen (NYSE:OCN), not with the servicing, writes the Sterne team, and it thus loses every time Ocwen shrinks or sells assets.
- The winners? Those would be the asset buyers: New Residential (NYSE:NRZ) and PennyMac Mortgage (NYSE:PMT).
- The analysts write their note the morning after Ocwen Financial announced more MSR sales, and the hiring of advisors to explore strategic options. The team is suspending Ocwen EPS estimates for 2015 and 2016 "since we have no idea what the new Ocwen will look like." Sterne's best estimate of tangible book value is about $10 per share.
- Previously: Ocwen volatile after business updates (March 2)
- OCN +5.4%, to $9 in premarket action. ASPS +2.6%
Wed, Feb. 4, 5:35 PM
Wed, Feb. 4, 5:08 PM
- Q4 net investment income of $53.1M vs. $106.5M in Q3, with net gain on investments of $11.2M vs. $70.4M. Net income of $26.5M vs. $54.9M. EPS of $0.34 vs. $0.69. Dividend is $0.61.
- Book value per share of $21.18 vs. $21.42 at end of Q3.
- Investment Activities segment $11M pretax income on revenue of $38.8M vs. $55.1M and $86.4M in Q3.
- Distressed Mortgage Investments segment realized and unrealized gains of $20.7M vs. $81.3M in Q3. Portfolios of performing and nonperforming loans increased in value somewhat, but was more than offset by decrease in home prices and tempered expectations for the future.
- Mortgage servicing rights portfolio grew to $34.3B in UPB from $32.3B.
- Correspondent Production Segment pretax income of $900K vs. $2.8M in Q3, with revenue of $14.2M down 29%.
- Conference call is underway
- Previously: PennyMac Mortgage NII of $53.1M (Feb. 4)
- PMT -5.1% after hours
Wed, Feb. 4, 4:45 PM
Tue, Feb. 3, 5:35 PM
- ACXM, ADEP, AFFX, AFOP, ALL, APU, ATML, AWH, BDN, BGC, BKD, BMR, CATM, CBG, CDNS, CEB, CINF, CLW, CMRE, CNW, DATA, ENS, EPM, ESS, EXAR, FBHS, FEIC, FMC, FORM, FOXA, G, GEOS, GIL, GLUU, GMCR, GPRE, HI, HUBG, ININ, IRBT, LCI, LNC, MAA, MAC, MTGE, MTRX, MUSA, NE, NXPI, ORLY, OSUR, PAA, PAGP, PMT, PNNT, PRE, PRU, PSEC, QUIK, RE, RRTS, RXN, SPB, SU, SYA, THG, TTMI, TWO, TYL, UA, UGI, UHAL, WFT, WGL, WSTL, YUM
Mon, Feb. 2, 2:52 PM
- "The combination of a negative duration and relatively long dated hedges lead to book value underperformance in a flat curve environment," merits a downgrade to Underperfrom for Armour Residential (ARR -5.9%), says analyst Doug Harter.
- "With above-average economic return volatility we expect CYS Investments (CYS -2.8%) to continue to have one of the lower price to book multiples among the Agency-only REITs," he says, also cutting to Underperform.
- Tight credit spreads combining with low yields will make it tough for New York Mortgage Trust (NYMT -2.2%) to meaningfully expand core EPS enough to cover the dividend, says Harter, cutting that stock to Underperform. He also notes NYMT has the highest price-to-book ratio in his mREIT coverage universe.
- Harter and team, however, still see some attractive values given the 12.9% discount to book the sector is selling for. PennyMac Mortgage Investment (PMT +0.2%), Two Harbors (TWO -0.7%) and New Residential (NRZ -1.6%) remain among top picks (though PMT and especially NRZ can hardly be considered mREITs).
- Previously: Credit Suisse downgrades three mortgage REITs (Feb. 2)
- Previously: JPMorgan previews Q4 for mREITs (Feb. 2)
Dec. 10, 2014, 4:44 PM
Dec. 3, 2014, 9:31 AM
- PennyMac Financial's (NYSE:PFSI) new division - PennyMac Commercial Real Estate Finance - will focus on mortgages for multifamily and other commercial property, with a typical loan value less than $10M. PennyMac Mortgage (NYSE:PMT) will then purchase and securitize the loans.
- Steve Skolnik will lead the team as Chief Commercial Lending Officer. He was most recently CEO and co-founder of ReadyCap Commercial, LLC.
- Source: Press Release
Nov. 5, 2014, 4:36 PM
Sep. 18, 2014, 4:57 PM
Sep. 2, 2014, 2:26 PM
- REITs and other so-called "shadow bankers" for the last several years have used captive insurers to join Federal Home Loan Banks, thus getting access to more dependable financing and better terms than they otherwise could.
- The FHFA for some time has voiced its concern over the practice, and under new rules just proposed, would sunset those existing memberships over a five year period.
- ETFs: REM, MORT, MORL
- Two Harbors (TWO -1.8%), Invesco Mortgage (IVR -1.9%), Hatteras Financial (HTS -1.2%), Dynex Capital (DX -1.1%), PennyMac Mortgage (PMT -1.5%), Annaly Capital (NLY -0.8%), American Capital Agency (AGNC -0.3%).
Aug. 7, 2014, 9:50 AM
- Q2 net investment income of $120.6M up 57% from Q1.
- Book value per share of $21.27 up from $20.88. Current price is $22.02.
- Investment Activities segment $70.9M of pretax income up from $33.1M in Q1.
- Distressed Mortgage Investments generated realized and unrealized gains of $73.6M, up from $39.9M.
- Mortgage Servicing Rights portfolio of $29.4B up from $27.3B. Net loan servicing revenue of $8.8M up from $7.4M.
- Correspondent Production segment pretax income of $2.4M down from $3.1M. Company acquired $7B in UPB of loans through its correspondent activities during quarter.
- Conference call at 10:30 ET
- Previously: PennyMac Mortgage beats by $0.34
- PMT +4.1%
Aug. 6, 2014, 4:51 PM
PennyMac Mortgage Investment Trust is a real estate investment trust investing in residential mortgage loans and mortgage-related assets. The Company operates in two segments: correspondent production and investment activities.
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