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14% Yields With High Risk From AG Mortgage Preferred Shares

Published Tue, 15 Sep 2020 07:00:00 -0400 on Seeking Alpha

Seeking AlphaREITs14% Yields With High Risk From AG Mortgage Preferred SharesSep. 15, 2020 7:00 AM ET|| About: AG Mortgage Investment Trust, Inc. (MITT), MITT.PA, MITT.PB, MITT.PCby: Colorado Wealth Management FundColorado Wealth Management Fund The REIT ForumThe #1 REIT Service Measured By Total ReturnsSummaryMITT’s preferred shares come with a dramatic amount of risk. The preferred dividend is currently suspended, and there is no timeline for bringing it back.
We believe MITT-A is at a low enough price to warrant a speculative buy for investors with sufficient risk tolerance. If it returns, the yield on cost would be over.
We remain bearish on MITT common shares. Investors who can get a good deal shorting the common shares may want to consider shorting them.
Alternatively, some investors may consider using options as a substitute for shorting the common shares. This is only for investors familiar with options.
Investors who are buying the preferred shares may want to hedge some of their risk by also taking a bearish position in the common shares.
This research report was produced by The REIT Forum with assistance from Big Dog Investments.
Preferred shares from AG Mortgage Investment Trust (MITT) currently carry a significant amount of risk, but we believe MITT-A (MITT.PA) is the best option at recent prices.

(Source: The REIT Forum)
The other two preferred shares from MITT are MITT-B (MITT.PB) and MITT-C (MITT.PC).
Our buy targets for the MITT preferred shares are:
MITT-A: $14.95 MITT-B: $14.63 MITT-C: $13.75 We believe the most attractively priced preferred share in this bunch is MITT-A.
Comparing MITT preferred shares
MITT-A is an extremely high-risk pick here. Notice the risk rating of 6. We usually say shares that are rated 6 are only good for "shorting", but preferred shares are generally very hard to short. A risk rating of 6 implies that we believe the survival of the company is in question. That isn't a death... Read more