Within 90 Days
PT #1 : $3.38
PT #2 : $3.78
Within 180 Days
PT #3 : low $4.00 range
PT #4 : $4.54
Stock has been beaten up last couple of days because of ER miss and they did not reinstate a dividend for their common stock. In essence, they gave notion they will pay a dividend before October in order to avoid excise tax (REITS must have a % of taxable income to shareholders). Preferred stocks are up because they will be paying a dividend to preferred stock holders. MFA will be required to pay 85% of their taxable income by October, as of now they have a taxable income of .10 cents per share. This would mean that a minimum 8.5 cent dividend would need to be paid by October to avoid a 4% excise tax; This amount can increase if taxable income increases, too. (This is to the best of my knowledge. Correct me if I am wrong). Their BV is ~$4 and has a bit more potential to move up (recovering unrealized losses) depending on credit spreads going forward. They have deleveraged, and are in a position to leverage themselves with assets as the markets direction in the near future becomes more clear. Funding has gotten more expensive but marginally. They've reduced the MBS exposure and are running a portfolio of whole loans which protects MFA if things begin to get worse.
In the short term, I expect them to come out of forbearance on or around June 26th (end of the month). I believe that they will reinstate their dividend at the beginning of the third quarter, October. Depending on how much it is and the progress MFA / Economy has made will dictate as to how far they will run.
PT #1 : $3.38
PT #2 : $3.78
Within 180 Days
PT #3 : low $4.00 range
PT #4 : $4.54
Stock has been beaten up last couple of days because of ER miss and they did not reinstate a dividend for their common stock. In essence, they gave notion they will pay a dividend before October in order to avoid excise tax (REITS must have a % of taxable income to shareholders). Preferred stocks are up because they will be paying a dividend to preferred stock holders. MFA will be required to pay 85% of their taxable income by October, as of now they have a taxable income of .10 cents per share. This would mean that a minimum 8.5 cent dividend would need to be paid by October to avoid a 4% excise tax; This amount can increase if taxable income increases, too. (This is to the best of my knowledge. Correct me if I am wrong). Their BV is ~$4 and has a bit more potential to move up (recovering unrealized losses) depending on credit spreads going forward. They have deleveraged, and are in a position to leverage themselves with assets as the markets direction in the near future becomes more clear. Funding has gotten more expensive but marginally. They've reduced the MBS exposure and are running a portfolio of whole loans which protects MFA if things begin to get worse.
In the short term, I expect them to come out of forbearance on or around June 26th (end of the month). I believe that they will reinstate their dividend at the beginning of the third quarter, October. Depending on how much it is and the progress MFA / Economy has made will dictate as to how far they will run.
Trade active:
I'd imagine by the end of the week we will get some PR about where they stand about forbearance, i'll be looking to avg down on todays dip.
Comment:
Been going sideways for a little while. I'd imagine we will break out here soon.