 |
| Dow | Nasdaq | About Us | Disclaimer |  |
RSS Feed |  |
Follow us on Twitter |
|
Featured Advisors |
Friday February 26, 2010
Chimera (CIM): Mortgage gains
by Mark Skousen, editor The High-Income Alert
Based in New York, Chimera is a specialty finance company that invests in mortgage loans and other real-estate securities. The real estate investment trust (REIT) is managed by a company we’ve traded profitably before: Annaly Capital Management. 
The group’s objective is to provide attractive, risk-adjusted returns to shareholders, first through dividends, and secondarily through capital appreciation. Chimera has been delivering both. The stock is up 25% during the last 52 weeks. Yet, the current payout is a mouth-watering 16.5%. Chimera’s primary investment vehicles are prime, jumbo prime and Alt-A residential mortgage loans. And Chimera has been taking advantage of the low interest rate and tough credit environment to scoop up bargains. Chimera also uses leverage to increase returns and to fund the acquisition of assets. It is highly adept at what it does. Profit margins, for example, top 90%. Yesterday, Chimera reported strong quarterly results that nonetheless were 2 cents below consensus estimates. Core earnings jumped 71% and CEO Matthew Lambiase gave a positive assessment going forward. Chimera offers us excellent capital gains potential and the kind of dividend that most investors can only dream about. So pick up this stock at market and place a protective stop at $3.25. If you prefer to play this one more aggressively, try the June $5 calls. Learn more about this financial newsletter at Mark Skousen's High-Income Alert. |
News Flash
|
|
The market sell-off also is creating some attractive, high-income opportunities. Consider Chimera Investment (NYSE: 