Quote:
Originally Posted by GregWeld
The "mortgage REITS" may be some of the others caught with a book of low yields in a rising market. Really - it depends on how quickly and how far the rates rise.
|
I just discovered one of these that I'm researching, New Residential Investment (NRZ). They claim that their portfolio will go up in value if interests rise. I'm still trying to figure out how that will happen and I don't know if I'll ever understand it enough to buy the stock but it pays a 10% dividend right now. I think they buy a lot of mortgages at less than par and then either service it or pool them together and sell them off at a profit once they clean up the pool somehow. They also do a lot of loan servicing, which apparently is a pretty profitable business in itself.
How many of you listen to the company conference call? I've listened to several here recently, COST, KR, HD, NRZ, SNA, LUV and you can learn a lot about the company that way. I heard Cramer recently say that if you own a stock you have to listen to the conference calls. I don't understand all of what they say but I also learn a lot too and get a sense of the attitude of the company heads. I think he might be right. They're not exactly riveting entertainment though.