[adios]

Here's a few I've mentioned in the past:

RWT - Redwood Trust. Yeah the yield curve is flattening, the real estate market is cooling some, and RWT just paid a $5.50 a share special divvy (which they've basically made up since they went ex div) but this company still hasn't paid out $1.70 a share in taxable earnings and that's only for the first 3 qtrs of their fiscal year. They'll like use 4th qtr earnings to pay next years regular divy and accrue a big special again. They're an MREIT and are required to pay out 90% of taxable earnings as divys. Typically they've paid 100%. Last year they had a special divy in the 1st qtr and I would expect that again. I like the management at this one as well. It has a market cap of $1.5 so I don't know if it qualifies as a small cap.

FF - First Financial. They're a CEF that has one year end distribution. This year it was $5.10 a share and were at $23 and change when they went ex div. They've also recovered some of the ground they lost when they went ex div. The last 3 year end pay outs have been substantial. They're trading approximately at NAV I believe.


As a side note, I recommended NFI (an MREIT) after it got hammered on the WSJ article last spring as I had a price target of $50. I've lightened up on it but it's trading between $57 and $58. I've read some good arguments pro and con on this one. The pro side expects taxable earnings to be huge resulting in an eventual bigger divvy. The con side states that their portfolio of MBS will shrink due to an expected decline in originations combined with the payoff of existing loans. I honestly prefer RWT to this one simply on a valuation basis but I will say that mortgage rates are still low so perhaps originations will do better than what people think.