- After a rough Q4, results at CYS Investments (CYS +1.3%) bounced nicely in the year's first three months, with earnings stronger than the dividend and book value dipping just slightly. The stock, however, now trades at a premium to book. Historians may want to check on the last time this occurred.
- Not necessarily commenting on CYS (which was the first mREIT to report Q1), Deutsche's George Bahamondes says certain names in the sector should see increased net interest margin pressure for the remainder of the year. His top picks in commercial are Starwood (NYSE:STWD) and Blackstone (NYSE:BX) Mortgage (NYSE:BXMT), and in residential Two Harbors (NYSE:TWO) and Redwood (NYSE:RWT).
- JMP's Trevor Cranston expects mREITs (REM +0.2%) to show pretty solid book value performance in Q1 thanks to more stable interest rates, and improved asset spreads.
- KBW's Bose George reiterates his neutral-to-cautious stance thanks to an expected two more rate hikes this year and two more in 2018. He also takes note of Fed musings about balance sheet normalization which would likely hit MBS spreads. He's a fan of Two Harbors and New Residential (NYSE:NRZ), with both well-positioned for higher rates.
- Reporting by Felice Maranz at Bloomberg
- ETFs: MORL, REM, MORT
- Annaly Capital (NLY flat), AGNC Investment (AGNC +0.1%)
- Now read: Risk Analysis For Annaly Capital Management's 11% Yield
Original article