Altisource Residential?

By: Java



If you were going to get into someone capitalizing on the residential property market, I might have advised Blackstone a few years back.  Those boys are always ahead of everyone in the game.  Of note: they also sold out big time after jumping in and cleaning up everyone's mess by buying many distressed properties.  

 

So no, I am not a huge fan of REITS investing in single family housing.  Did you buy in at $14?  That's the high.  It's at $11.50 now.  That's not terrible.  

 

There's a couple ways you can play this.  First, that thing pays 5.25%.  DOn't ignore that and reinvest it.  INTO WHAT YOU BOUGHT.  That way you will actually see the investment you made and all of it's spawn dumped into the same bowl.  People forget the value of their dividends.  My kdis look at my portfolio and say "my gosh dad, you got KILLED on BP, you got KILLED on KMI."  And several others.  What they see is the reinvestment.  That's free money.  So while it might ahve gone down from teh reinvestment date, that reinvestment is real, it's free and it's creating more dividends.  Value.

 

Your 5.25% has value.  Reinvest it.  Next, that $2.50 drop isn't that bad.

 

Be patient.  Unless you've decided you don't like this business.  And I don't blame you, I don't.  That said, REITS move up and down within a fairly narrow range.    What scares me a little biut about the housing market is we are starting to see easy financiang permeate once more and I feel like we didn't learn our lessons very well from the last time.    We never do.  Easy money and easy credit annihilated the stock market in both 1929 and 2008.

 

I was goign to suggest some puts for you as some things you might be interested to look at but a quick look at it tells me that's not a very heavily traded stock, and thus the options on it don't have much activity.    If it did, with it's movement, a June sale of a $9 or $10 put might be a way to either get a bargain on the stock or make some easy money and invest it back into the REIT.  But I don't see any real bid/ask activity at those levels on that thing.  

 

 

 

 

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