Selling a Mortgage REIT
Hatteras Financial (HTS) posted a pretty good earnings report earlier this week, but I've decided to sell my shares. Narrowing interst rate spreads and an increase in prepayments are raising the risk level to a point where I'd rather cash out of a nice run. I haven't read all the reports, but suspect the rest of the mortgage REITs are seeing similar pressures.
I may very well be selling too early. Earnings are still good and the dividend yield should stay up above or near double-digits for quite a while. But, I'd rather lock in a gain than take the risk of turning a winner into a loser.
I have to wait a couple days to make the sale due to the Fool's trading policy for writers, but plan on selling early next week.
What's the Foolish take? Are the big yields of the mortgage REITs still worth the risk or are we near the end of a great run?