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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Sunshine who wrote (2550)	7/10/2012 10:17:09 AM
From: Elroy	Respond to of 2561

In your opinion, what are the best mRIETs out there, and why, at current prices? The best has been AGNC, but it has had such a nice run up in share price that it's really hard to buy now. It's at about 1.2x book and a 14% yield. I guess IVR or NLY would be my preferred safer picks. However, with earnings season up in the next two weeks, and the next dividend for most of them not to be paid until late Sep, I don't think you need to hurry. I'd wait until after earnings season, see where book values have shifted, and then decide. It would stink to buy one today, only to find two weeks from now that it's book value has declined so the share price falls accordingly. If you just can't wait, ARR just did a secondary today, and trades ex-dividend on Thursday, so that one might be good to buy on this Friday or Thursday. They pay dividends monthly, so the ex-div thing is a smaller deal for them than the quarterly payers. They will pay a dime per month for Q3.

To: Mr. Sunshine who wrote (2550)	7/10/2012 11:40:46 AM
From: KaiserSosze	Respond to of 2561

I am cautious about buying the mREITs knowing they will crash when interest rates go up, especially after the run up. I'm curious, when do you think this might happen (I would guess 18-24 months)? Also, what's your definition of "crash"? I could see the dividend getting cut, but do you really think the stock gets trashed (or are you just talking about slower or no growth)? Thanks

To: Mr. Sunshine who wrote (2550)	7/12/2012 7:59:11 AM
From: Elroy	Read Replies (2) \| Respond to of 2561

CYS is probably a "safe" mREIT to buy right now. The just did a secondary, so you don't need to worry about that for another three months. They also announced their preliminary Q2 results, which were good with book value up to about $13.52 and GAAP EPS of ~88 cents, easily covering the 50 cent dividend. So if you buy it now for about $13.80, you're only paying 1.02x book, and its unlikely to get a negative shock from a secondary or poor quarterly results. In fact, I think I'll buy some!