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Today's fall is overdone
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WAC is the successor to Hanover Capital Mortgage (HCM). Hanover, not being big enough to get a bailout, got squashed when the mark-to-market on their prime mortgages caused their loans to get called. The HCM management team now runs WAC and they are good at what they do. Current dividend on this REIT is $2.00 a year. Once the investment community gets the idea that WAC isn't going away, then the price will rise to a level consistent with a $2 dividend. I'd guess that it will take another year for people to believe and then about six months to run the price up. Target $25 by mid 2012.
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Dividend $2.00 Earnings $1.65
Can you say upside down?
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Mortgage holders will actually lose money if they default on their loans.
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Careful with this one... Subprime & troubled loan servicer primarily in Florida could be disasterous. But, if the world doesn't end, then this stock is undervalued. Cautiously optimistic.
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This stock is cheap like potatoes, at a PE of less than 4, and paying 12% dividend, in a recovering economy where they face better than anticipated recovery of bad debt from their "customers" = earnings potential
What else can you ask for if that is the business you operate in?
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Good valuation, short squeeze in the making
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Undervalued : Book Value/Share is 25.60 currently trading at 14.50.
Dividend is high. And they just went through a merger. As i see it, there are only two ways WAC can go, UP or fail. Their financials suggest otherwise than a fail, so the stock must go up in time.
How much? is the real question.
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REIT's with their high dividends, coupled with the potential for growth will provide safer returns than many equities. Just make sure the REIT you pick has adequate cash/income to maintain the dividend.
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Government spending to improve the mortgage industry may work...if it does, this REIT seems well positioned to make a quick buck and then die off again, so I'll make some money while the sun is shining with this call!
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This stock is totally WAC!
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Return of Realty by George Lucas
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positive rate of return
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Building a portfolio based on insider cluster buys.
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Spun off by WLT (Walter's Energy) and merged with Hanover Capital Mortgage, is a REIT that manages a 1.8 billion dollar portfolio of Sub-prime, prime and non-conformingl (ie Moblil Homes) Mortgages ( with a delinquency rate under 6%). Insiders have recently gobbled up shares at a furious clip taking the stock price from 7 to just under 14 in less than 2 weeks. This, in spite of generous stock grants. One director, also Chairman of WLT, took down almost 2 million dollars worth of stock in three separate buys in the open market. The only revenue this company has at present is the yield from the mortgages, but with all the gov't programs, and the mortgage servicing and insurance divisions, there could be substantial earnings power hidden by all the recent machinations required to merge the companies. Not much info available since the merger was completed only a month ago, so you really need to read every SEC filing. Could be a real sleeper.
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