For what it's worth, I'll be monitoring NB's site for an adequate discount to NAV. We have to be close. Then I'll poke a few shares in our value accounts. If I can get 13-14% while I wait for the take over, I'll be happy. My clients will be happy.
Mark
See, e.g. NFI (NYSE: NFI).
From its 143 peak ==> closed at 6 on Friday.
Pays 311% dividend. Doesnt seem to deter the shorts (float is > 50% short).
Must be a reason for the high yield.
Hmm..... let me try to explain the difference between NRO and NFI....
But before that, just a quick observation that ... you make my point for me.... People are throwing out everything that has anything to do with real estate, without even trying to figure out what it is. If it has words like Real Estate or Mortgage assosiated with the company.. it goes out the window.... Thats the extreme panic environment we're in. ....
Now... NFI... is a mortgage lender, its a single company, they operate based on their warehouse lines of credit. Read heavy leverage, and specialize in "nonconforming" mortgages... guess what it is. NFI's business is hurt, the securitization of nonconforming loans is pretty much dead, and the other businesses will probably pull through overtime. Or Not... it doesn't matter.
NRO on the other hand is a closed end ETF... their portfolio consists of 75% common stocks of REITS, and 25% prefered stocks. Many of those REITS are good, highly profitable companies that own a lot of good income producing propeties. And will survive through this debacle and come out on the other side more profitable then they ever were. They can't cut their dividends, since they are REITS. Their dividends can be only cut if their profits drop. NRO's portfolio is very diversified along the whole REIT spectrum. Appartments, Offices, Retail, Healthcare, and so on...
The only REITS that are really getting hurt right now business wise, are so called Mortgage REITS. and they are getting hurt mostly because of leverage and the market conditions, that put very low value on the mortgage loans, even if those loans are performing. Thats where the main bloodbath is in REITS. And even though a lot of those REITs will survive, the market is heavily discounting them.
Now, look here.... this is how the sharks operate. Scamming money out of the gullible.... Use the market pressure to heavily discount stuff, issue margin calls and buy on the cheap, while Sowood, AHM and others lie in shambles.
"July 31 – Financial Times: “Forget vulture funds that feed on the carcasses of dying companies or investment vehicles by snapping up chunks of distressed debt. Citadel is proving to be more of a whale – simply swallowing them whole. Last year, the $14bn hedge fund teamed up with JPMorgan Chase to ingest Amaranth’s positions at bargain rates when the $9bn hedge fund made disastrous bets on natural gas. Its latest move is to buy Sowood’s credit portfolio, after the once-$3bn hedge fund saw its value halve as a result of bad bets… Unlike some funds that manage many billions of dollars with small staffs, Citadel employs more than 1,000 people.”
BTW, this is the type of thing greenie should be worried about:
http://biz.yahoo.com...06145.html?.v=1
You can short a take-over candidate with a big divvy if you want. You can afford to lose the money with all those profits you made on the way down.
Mark
Mark, if you want a potentialy high pay out play, trading at a deep discount, take a look at RAS.
There is a cloud of uncertainty here, and "potentialy" high risk. But if they pull through, its going to be a handsome reward.
I think the company has sufficient liquidity to survive this situation. And the worst case scenraio report that I read says that their profits/dividend will be cut in half.
Even if you cut it by 75%, still looks like a good deal. Of course there is an uncertainty risk, but I think the stock may be reflecting that already.
