Get Paid by Following Insiders

Mortgage REITs have been under pressure all year as investors have dumped the shares due to fears of rising rates and tightening spreads have plagued the group. Many of them have seen their asset value decline and been forced to cut dividends as a result of adverse action on the mortgage-backed securities market. But several top executives at these REITs have expressed their belief in their funds over the past few months, spending a large amount of cash to buy shares of their mortgage REIT.

Shares of AG Mortgage Investment Trust (MITT) are down more than 25% so far this year, but CEO David Roberts thinks the REIT will turn the corner sometime soon. Annaly Capital (NLY) is one of the leaders in the mortgage REIT sector, and the stock has not been spared the pummeling seen in this group. So far in 2013 the shares have fallen by more than 25% … but insiders seem to think that better times are ahead. Insiders are not infallible, but they do have a strong record over the years. They tend to be early — so investors might want to scale into their purchases of these high-yielding securities. But history would indicate that we should do very well holding these in a long-term income portfolio.

Source: Investor Place

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