If You Missed Out On This 10% Yield...

Investors who focus on dividend yields are more likely to sell shares after a cut is announced. The price-to-book ratio looks attractive for this stock. It has returned to our buy range. We utilize common shares in mortgage REITs for trading opportunities based off swings in their price to book value ratio. We don't use them for income.

We purchased shares of Anworth (ANH) on 3/11/2019. We dumped those shares on 4/25/2019 (see the grey arrow at top), which turned out to be extremely close to the peak. The decision to dump shares followed a rapid increase in their share price combined with a bit of weakness in several peers. In a nutshell, the price-to-book ratio was moving higher for ANH and lower for some of their peers. That was our signal to take profits and run. ANH is back in the buy range. The price-to-book looks attractive and the other risk factors are played out, which reduces our expectation for further downside risk.

Source: Seeking Alpha

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