As I’ve said before, I’m not here to do what equity analysts at Wall Street firms do.
They model these amREITs and mREITs, take their best guess as to changes to the portfolio each quarter, and then predict earnings, dividends, book values and the like. I don’t. This job doesn’t pay enough to do that.
So, I’ll summarize what I’ve seen in Q3 earnings prediction research from the handful of Wall Street firms whose work I’ve seen so far.
1. Lower book values due to a decline in underlying MBS prices
2. Steady earnings due to continued favorable financing spread.
3. Potential for upside surprise from those who increased leverage or nimbly played for trading profits on their portfolio or their hedges.
4. More secondaries coming if the stock prices increase.
If you listen to all the conference calls this week, you’ll probably get more of a sense of the managements. That still remains my main emphasis. The market always changes, so the strategy and temperament of the various management teams is how I make distinctions among them.