I’ve made no secret of my admiration for Merrill Ross’ coverage of the mREIT sector. Today, she sent around a note to investors that could have been one of mine. I say this because she points out the nature of portfolio managers’ choices in a way that doesn’t simply measure price/book, leverage, or spread to see relative value. Far too much of the analysis Wall Street provides is mechanical that way (not that there’s anything wrong with analyzing the numbers — I did choose math as my major in college). But after you’ve looked at the numbers, a very important part of managing investments in the mREITs is understanding how the companies are making their decisions over time, and how they choose which risks to take and which to eschew.
For disclosure purposes, you can read the full legal text at the Wunderlich Securities web site, but what matters is that Merrill currently owns no MFA stock personally, and her firm does not have a current investment banking (capital raising) relationship. Read the rest of this entry »