Sell Chimera Before The Earnings Announcement Tonight

Thu, 02/09/2012 - 10:03 EDT - Seeking Alpha

By Parsimony Investment Research:We have hightlighted the risks of owning Chimera Investment Corp. (CIM) in previous articles, and we believe that investors should remain extremely cautious about the stock.In general, we are still bullish on mortgage real estate investment trusts ("mREITs"), particularly agency-focused mREITs like Annaly Capital Management (NLY) and American Capital Agency (AGNC). We think the current economic and interest rate picture is positive for mREITs. A weak economy is actually a good environment for mREITs, which benefit from low interest rates and a steep yield curve (see chart below). See our recent article "High Yield in a Slow-Growth World: Mortgage REITs" for more details.That said, Chimera is a non-agency focused mortgage REIT. As shown in the table below, over 70% of CIM's portfolio is allocated in non-agency RMBS.Whereas agency mortgages are guaranteed by government sponsored entities (implying limited credit risk), non-agency securities do not carry a similar impliedComplete Story »

Original article
Login or register to post comments

Chimera: An mREIT Not Worth Owning
By Parsimony Investment Research:In general, we are still bullish on mortgage real estate investment trusts (“mREITs”), particularly agency-focused mREITs. We think the current economic and interest rate picture is positive for mREITs. A weak economy is actually a good environment for mREITs, which benefit from low interest rates and a steep yield curve.
Avoid Chimera, Try 3 Mortgage REIT Investments With Stronger Risk/Reward Profiles
By Parsimony Investment Research:Founded in 2007, Chimera Investment Corporation (CIM) acquires and manages residential mortgage-backed securities, residential mortgage loans, and real estate securities. Chimera is a real estate investment trust that is externally managed by FIDAC (Fixed Income Discount Advisory Company). FIDAC is a wholly-owned subsidiary of Annaly Capital Management, Inc.
Chimera Cuts Dividend Again: What Should Investors Do Now?
By Parsimony Investment Research:As highlighted in previous articles, we have never really been a fan of Chimera Investment Corp. (CIM).
Is Chimera's Smoke Signaling A Fire?
By Parsimony Investment Research:As if the second consecutive delayed filing wasn't enough to make Chimera Investment Corporation (CIM) investors a little squeamish, the company also recently announced that it has fired its auditor.
Annaly Capital And American Capital Agency Are In The 'Buy Zone'
By Parsimony Investment Research:Agency mREIT investors can thank FBR Capital Markets for the sell-off this week.
The Fed Is Telling Investors To Buy Annaly Capital
By Parsimony Investment Research:Well ... the Fed didn't explicitly say to "buy" Annaly Capital Management (NLY), but we think that the Fed's recent comments are certainly bullish for mortgage REIT investors.
A Closer Look At American Capital Agency's Cash Flows As Of Q2 2012
By Ron Hiram:My prior articles focused on master limited partnerships ("MLPs"), an area I have long followed and invested in. My concern with overly concentrating my portfolio in MLPs has led me to examine mortgage Real Estate Investment Trusts ("mREITs") as an alternative yield producing vehicle.
A Closer Look At Annaly Capital Management's Cash Flows As Of 2Q12
By Ron Hiram:My prior articles focused on master limited partnerships ("MLPs"), an area I have long followed and invested in. My concern with overly concentrating my portfolio in MLPs has led me to examine mortgage Real Estate Investment Trusts ("mREITs") as an alternative yield producing vehicle.
Annaly: The Next Victim Of Political Change
By Cris Frangold: The mortgage market is entering uncharted territory with interest rates falling to unprecedented lows and the Federal Reserve trying to drive them even lower.
Chimera: Misunderstood, Undervalued mREIT
By Zvi Bar: Chimera Investment Corp (CIM) continues to be the contrarian’s option amongst Mortgage REIT equities, with characteristics that the market is not properly valuing.

Main menu

Secondary menu

Sell Chimera Before The Earnings Announcement Tonight

Related

Latest

User login

Our Blog

Markets Map

Follow Us

Secondary menu