Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mortgage REIT Chimera Investment
With that in mind, let's take a closer look at Chimera's business and see what CAPS investors are saying about the stock right now.
Chimera facts
Headquarters (Founded) |
New York City (2007) |
Market Cap |
$3.44 billion |
Industry |
Mortgage REIT |
Trailing-12-Month Revenue |
$543.1 million |
Management |
CEO Matthew Lambiase CFO A. Alexandra Denahan |
Trailing-12-Month Return on Equity |
20.7% |
Cash/Debt |
$236.2 million / $3.8 billion |
Dividend Yield |
17.5% |
Competitors |
Capstead Mortgage
MFA Financial |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 96% of the 633 members who have rated Chimera believe the stock will outperform the S&P 500 going forward. These bulls include pjmalloy and Buzzworthy1.
Just last month, pjmalloy brought some inside information to our community's attention:
Insiders are buying which is a bullish signal. Worst is behind the company and the company will get stronger as housing market improves. Stock is trading at a very low P/E and is set to rebound.
Like its parent company, Annaly Capital
CAPS member Buzzworthy1 elaborates:
I can tell you that non-agency RMBS [residential mortgage-backed securities] is currently out of favor, and [Chimera] is able to take advantage of this and purchase these assets at a deep discount. ...
Granted, mortgages are garbage right now, but [Chimera] can pick top quality credit tiers in the securities they purchase. If RMBS were to take another hit, [Chimera] could suffer significant losses via writedowns but not losses like they sustained in 2008 since they have deleveraged since then. ...
Since [Chimera] profits from the positive spread or carry between short term and longterm rates, the next couple of years should be handsomely profitable for [Chimera]. ... Given the massive issuances of US Treasuries and the Fed's heavily bloated balance sheet, mathematically rates on the long-end of the yield curve are bound to rise sooner than later. [Chimera] is benefitting from the Fed's extended low interest rate policy.
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