PennyMac Mortgage: We Are Loading The Bonds And Considering The Preferred Stock
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Arbitrage TraderInvesting Group LeaderFollow5ShareSavePlay(10min)CommentsSummaryPennyMac Mortgage Trust is analyzed for yield opportunities amid a normalizing yield curve.I favor PMT's 9% baby bonds for their attractive risk/reward profile.The 6.75% preferred stock is reviewed for capital appreciation potential.Market-adjusted credit metrics and sector comparisons support a preference for PMT's baby bonds over other instruments.Grandmother explaing that safety comes first Willie B. Thomas/DigitalVision via Getty Images We have finally seen the yield curve somewhat normalize, with long-term yields being higher than shorter-term yields. As any guess on the future of the yield curve is more ofThis article was written byArbitrage Trader15.47K 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 PMTV 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.