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Recent REIT Forum Trade Alert

Mar. 26, 2021 12:54 PM ETFBRT5 Comments
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.


Seeking Alpha Analyst Since 2013

We post our portfolio for you. You also get real-time alerts on every trade we place. Our reasoning for placing a trade is explained in clear English. You can even see the exact trades with the images we include from our stock accounts. We don’t offer you several different “portfolios”, instead, we show you exactly what we own, when we bought it, and how we are doing in that position. We make it simple for investors to follow our strategy. 

You’ll find several reports on The REIT Forum that don’t get posted to the public side of Seeking Alpha. Many of our public reports are dramatically reduced versions of subscriber articles. If you enjoy our public articles, you’ll love the content we keep for subscribers.


  • The following alert was sent to subscribers of the REIT Forum on 3/22/2021.
  • This trade alert is reproduced verbatim. Consequently, it includes links to subscriber exclusive content.
  • It also includes our usual opening for subscriber articles, so it may read a bit different than most blog posts you've seen before.
  • We've posted another trade alert today purchasing another position that has also been on a nice sale.
  • Our trade alerts include screenshots of order execution because it really drives two points home. You know our view and you know we're actually trading shares, not just updating a Google Sheet.

Dear New Member,

Welcome to the service! You’ll find a wealth of research and tools available for subscribers. This article is filled with links to several of the resources we provide for subscribers.

Latest Portfolio Update and Market Update

Our prior portfolio update was published on March 2nd, 2020.

Click HERE for the March Portfolio Update


Portfolios & Tools

Our portfolios and tools can all be accessed through Google Sheets using the links under “Investing Resources”. It is on the right side of your screen when you are on the home page for The REIT Forum:

The green arrows highlight our core Google Sheet pages.

What’s in those sheets?

The first 8 with green arrows are:

Tab Name


Safe Income Portfolio

Simple ratings on lower-risk securities for safer income.

CWMF's Portfolio

Simple ratings on each position CWMF owns.

CWMF's Trades

All trades we've placed (open and closed).

SK's Trades

All trades Scott Kennedy placed (open and closed).

Preferred Shares

Ratings, targets, and extensive information on preferred shares

Equity REITs

Ratings, targets, and extensive information on equity REITs

Mortgage REITs

Ratings, targets, and extensive information on mortgage REITs


Ratings, targets, and extensive information on BDCs

On the same Google Sheets, you can also navigate to tabs for:

Tab Name


All Stocks

Most U.S. listed REITs, including those we don't cover.

Common Cards

The "Index Card" for every common share we cover.

Preferred Cards

The "Index Card" for every preferred share we cover.

Returns Chart

Our month-by-month, year-to-date, and cumulative returns calculations.


Trades Placed

  • Bought 1,000 shares of CMO-E (CMO.PE) at $25.2928.

Index Cards and Quick Commentary

Source: The REIT Forum

We purchased 1,000 shares of CMO-E at $25.29 (rounded). We previously highlighted CMO-E in the March Portfolio Update as a top pick we don't own. During the March Mid-month Update on Opportunities, CMO-E was trading closer to $25.50, which would've removed the upside to call value.

With shares back at $25.30, we have sufficient upside to call value (thanks to having nearly a full quarter of dividend accrual).

Per StreetSmart Edge, the expected ex-dividend date is 3/30/2021 (which we believe to be accurate, though we cannot guarantee their accuracy). We checked Capstead's press release and it gives us a "date of record" for 3/31/2020, which matches with the 3/30/2021 ex-dividend date reported in StreetSmart Edge.

We expect to treat this investment as a dividend capture and may look to close the position out when we reach a total return of around $.32 to $.40 per share.

The most likely scenario for reaching that level of return is to collect the $.47 dividend and to eat a small loss on the price per share. Since we're running 1,000 shares through the trade, the target profit is around $320 to $400. We are using a tax-advantaged account to mitigate any tax issues.

If shares do not climb in price prior to the ex-dividend date or if they drop more than expected after the ex-dividend date, we are comfortable simply sitting on the shares for a while.

CMO's common stock is reaching new post-pandemic highs and is trading at a price-to-book ratio of about .99 by our estimates. At this level, it seems CMO-E should pretty strong support at $25.00 or higher, even right after going ex-dividend.

Investors should beware of liquidity. CMO-E has less liquidity than some of the other preferred shares and this trade only makes sense if the right prices are available. Ideally, that means anything less than $25.35. In the minutes we spent writing up this quick alert, we've seen about 5,000 more shares trade hands between $25.30 and $25.29. That means about half of the volume so far for the day (a little over 12,000) occurred in the last few minutes. We ONLY use limit-buy and limit-sell orders for preferred shares.

Due to the liquidity issues, it is likely that the price may bump over $25.35 in the very near future, making this trade more difficult to enter.

Investors can be patient and watch for another dip in the shares. The sellers showed up even at $25.30, so they may show up again. This is a fine scenario for investors to simply enter a limit-buy order for the day and then check back later to see if it executed.

We don't leave limit-buy orders open over the ex-dividend date because we don't want it to execute at that price after shares go ex-dividend. We aren't confident in relying on anyone else to adjust the bid price to account for the ex-dividend.

Price History

We highlighted CMO-E a few times. Within the last 30 days, we mentioned it three times. Two of those times were to highlight the opportunity (at $25.04 and $25.14) and one was to recognize that near $25.50 there wasn't enough upside.

We put together the following chart for a quick timeline:

Source: StreetSmart Edge

We can see that shares rallied quite a bit and we were expecting the opportunity to be gone. However, the last few days shares kept dipping back down to $25.30. Since we had already written about the opportunity (multiples times), we decided to pull the trigger.


Source: Schwab

Returns on Open Positions

Source: The REIT Forum


We began by highlighting the opportunity in CMO-E in Preferred Shares Week 242 at $25.04 and again in early March (in the March Portfolio Update) when shares were trading at $25.14. That gave subscribers an opportunity to enter positions ahead of us.

When shares rallied to trade near $25.50, we figured the opportunity would be off the table. However, they've dipped back to about $25.30 in each of the last four days. Today, we spotted the dip in real-time and placed an order.

There are two difficult aspects to a dividend capture. One is finding a share with the right traits for the trade. The other is getting sufficient liquidity. When shares dip and create such an opportunity, sometimes they will dip and provide a similar opportunity in the near future.

If we don't see the right price for closing the position after shares go ex-dividend or if we simply don't have compelling alternatives, we may simply hold the shares for a while. Even though we are expecting to use the trade as a dividend capture, we aren't forced out of the position after the shares go ex-dividend.

Analyst's Disclosure: I am/we are long all shares in cwmf's portfolio.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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