Chimera Investment Corporation: We Play Defense With The Bonds And Still Get Paid Close To 9%
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Arbitrage TraderInvesting Group LeaderFollow5ShareSavePlay(7min)CommentsSummaryChimera Investment Corporation (CIM) exhibits moderately solid fundamentals for an mREIT, with total assets of $15.1 billion and a market cap of $1.07 billion.CIM's portfolio is heavily weighted toward re-performing loans (64%), with significant leverage (debt-to-equity 4.8x) and high exposure to collateralized debt.The baby bonds and preferred stocks yield 8–9.4%, compensating for elevated risk; CIMP and CIM.PR.A stand out for their higher yields among peers.Credit analysis using Moody’s methodology results in an overall Ba3 rating, in line with sector peers and reflecting both strengths and structural risks.
Frazao Studio Latino/E+ via Getty Images Chimera Investment Corporation (CIM) continues to attract attention with its high-yield fixed-income instruments. We have already written about the company, but today we will look at the opportunities it offers and assign it a credit ratingThis article was written byArbitrage Trader15.44K FollowersFollowArbitrage Trader, aka Denislav Iliev has been day trading for 15+ years and leads a team of 40 analysts. They identify mispriced investments in fixed-income and closed-end funds based on simple-to-understand financial logic. Denislav leads the investing group Trade With Beta, features of the service include: frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of 1200+ equities, IPO previews, hedging strategies, an actively managed portfolio, and chat for discussion. Learn more.Analyst’s Disclosure:I/we have a beneficial long position in the shares of CIM.PR.C either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You