SHartwell

Is Thornburg Mortgage Common Really Worth $3.88B?

Good analysis, and one with which I generally agree. However, let's be "Pollyanna-ish" for a moment...

TMA earned roughtly $280 million in 2005. This divided by 3.1 billion shares is roughly $0.09 per share. There may be upside to this number, as many of TMA's competitors are gone and spreads have widened. (yes, there is now the interest on the new debt, but if markets recover this is also capital that can be put to good use).

$0.09 times a P/E of 15 is $1.35. Not too far off the current share price. So shareholders are clearly being hugely optimistic (unjustifiably so in my opinion), but they may not be downright delusional...