Maybe it was just the rate cuts, maybe it was talk of a bailout for insurers, but money has been flowing into the Alt-A investors over the past two weeks.
Redwood Trust (RWT), which closed at $33.41 on January 22, has risen 34.5% since to close at $44.94 today. Likewise, Impac Mortgage (IMH), which I had admittedly left for dead, has climbed from $0.75/share to $1.71/share in the same time frame - a stunning 128% gain. Even Luminent Mortgage (LUM) has rallied 57%, moving up from $0.56/share to $0.88/share. Both stocks have a chance of regaining compliance with the NYSE listing requirements if the trend continues.
Of the three, I am of course the most interested in RWT. Although it's still well off its mid-60s highs, RWT has weathered this storm much better than most companies. Even so, it's not yet clear sailing for Redwood. Earlier this week, S&P put several classes of its Acacia CDOs on creditwatch negative.
Redwood Trust (RWT), which closed at $33.41 on January 22, has risen 34.5% since to close at $44.94 today. Likewise, Impac Mortgage (IMH), which I had admittedly left for dead, has climbed from $0.75/share to $1.71/share in the same time frame - a stunning 128% gain. Even Luminent Mortgage (LUM) has rallied 57%, moving up from $0.56/share to $0.88/share. Both stocks have a chance of regaining compliance with the NYSE listing requirements if the trend continues.
Of the three, I am of course the most interested in RWT. Although it's still well off its mid-60s highs, RWT has weathered this storm much better than most companies. Even so, it's not yet clear sailing for Redwood. Earlier this week, S&P put several classes of its Acacia CDOs on creditwatch negative.
1 comments:
RWT which employees about 75 employess is by far one of the best MREIT. I believe NFI novastar financial NOVS can adopt this model. They have to move of the credit food chain and as RWT SAYS NO NEED TO EMPLOY A MGT BANKING OPERATIONS OR SERVICE. They just cloud their objectivity in building a risk adj portfolio. NOVS which had 8.6m or 99% of their float shorted in Dec 07 and over 12 M share counterfeited or fail to delivered via the REG SHO SEC exemption allowing Option Marker Maker to hedge puts the shorts have been buying, (like Copper River Mgt that owns 2.5m puts as of 13F filing 12.31 aka Dave Rocker aka Rocker Partners. The same co that just turned and bought 5.6% of CIM the MREIT that just raised 500M on NYSE and rang the bell backed by Mike Farrell of NLY). Moving from NYSE to the PINK SHEETS will stop this counterfeiting since NO NEW OPTIONS CAN BE WRITTEN ON PINKSHEET STOCKS SO As the puts expire the omm will have to buy back shares of NOVS to prevent being unhedged. Where they will find shares of NOVS is beyond me since all of the float is already lent out (Citi paying 25% to borrow) so as all of these puts outstanding on NOVS expire the squeeze will be unbearable. See RWT qtrly book which shows GAAP BV in Q3 of 5 vs core economic BV of 28. Mostly because some big hedge funds could destroy prices, investor confence in credit agencies and use GAAP to write off most of the value. No wonder all these firms are popping up to buy MBS for pennies on the dollar after shorting the hell out of them. NICE game if the SEC let you get away with it.
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