MHCO continues to be strong. Gotta think that Katrina will have a favorable impact on MHCO for years to come.
Its $6.40 today on nice volume.
I cant reply to mail being a free member.
---------
To: itilis2003 (who wrote) 8/30/2005 5:32:43 PM
From: MCsweet
HSM seems like a reasonable buy here, 8% is a great yield and buying at a discount is good. However, in the next few years HSM could likely cut its dividend again as their leverage costs increase while long-term rates might stay range bound.
Also, you have to be comfortable that long-term rates don't rise much from here, otherwise you will see a hit to the NAV. The yield will go up in this case, but unfortunately it will be because the NAV and Mkt price are going down.
If you want decent yields (6-7%) and don't mind some credit exposure, you can buy floating rate/senior loan funds at around 8% discounts. In this case, you don't have interest rate risk, but you do have risk if the economy goes down the tubes. Currently defaults on these portfolio are minimal, and they are less credit exposed as say a pure high yield fund, but they will get hit in a recession.
By the way, fed fund increases will help your dividend on the floating raters, but will hurt your dividend on HSM.
MC
-------
I dont know anything about buying floating rate/senior loan funds. Where would I begin my research ?
I figured HSMs insiders had a little better insight than I do with both their portfolio and future interest rates or dividend cuts. So far, HSM is up 2% since I bought and NAV was $14.28 yesterday and they kept this months dividend steady at 9 cents.
Suma mentioned TMA and it has a nice yield, but I really dont like companies that "tout" their insider buying. Plus, the stock is up a good bit from their buy prices so Im going to pass for now.
I added some FSP on weakness today. Not sure why its down.
My hope is that after their first conference call in early Nov.. FSP will be picked up by some firms and their buying will get the price up a buck or two. So far, they havent had a conference call so they are "below the radar" I believe. |
