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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend

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To: Elroy who wrote (2553)7/16/2012 12:23:40 PM
From: Elroy   of 2559
 
Gotta be quick with these mREITs, I was recommending CYS a few days ago at $13.80, now it's already up to $14.12. The sector has been on a tear lately.

The only one not going well is CIM. They have some accounting issues, and have cut the dividend repeatedly, so I guess it makes sense until the bleeding stops. Still, with the shares at $2.34, and Dec CIM calls offered at 40 cents, that's sort of tempting. You're only paying 6 cents over intrinsic value, and its possible that before Dec they 1- work out their accounting issue, 2- stop reducing the dividend, and 3- trade back up to their book value which is (I think) $2.70. If it gets to $2.70 then the calls would go to at least 70 cents, a 75% gain from 40 cents.

That's not all that crazy of a trade if you ask me.
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