A mortgage lender stock? In this market?
Yes, if you can tolerate high risk, and Annaly Capital Management, Inc. (NYSE: NLY) is the company to consider.
Analysts believe Annaly Mortgage has taken the steps needed to position itself in the challenging and risky residential mortgage-backed securities market, with most analysts expecting earnings growth to accelerate in 2008. The Reuters FY 2007/FY 2008 EPS consensus estimates for NLY are $1.27 to $1.96
That's not to say that mortgage sector conditions will improve universally, but the point here is that NLY is in a decent position well before attitudes toward the industry are likely to change. In that sense, NLY is a 'get ahead of the pack' play, but it's only for high-risk investors.
For the most part, Annaly has realigned its portfolio to remove credit risk and has a business model that concentrates on managing interest rate and prepayment risk.
The First Call mean rating for NLY is: Buy [12 firms]. Mean 2008 target: $18.90 [high: $20, low: $18].
Stock Analysis: Annaly Mortgage is a high-risk investment not suitable for low-risk or moderate-risk investors. Sell/Stop Loss if you to purchase shares in this company: $9.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
Annaly Mortgage recalibrates to re-ignite profits
Posted Jan 11th 2008 6:39PM by Joseph Lazzaro
Filed under: Stocks to Buy, Housing
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Reader Comments (Page 1 of 1)
1-12-2008 @ 10:05AM
michael schneider said...
Annaly Mortgage recently raised their dividend 30%-- something more than an expression of confidence in the earnings prospects. The Barrel View free e-mailing at htttp://www.Barrelomoney.com has liked the stock partly because of the payout and partly because they have made a big bet on lower interest rates and it is clear that rates will be headed south. (http://www.Barrelomoney.com includes a free list of stocks discussed in the Barrel View for those interested).