Prepared by Chris, CEO Quad 7 Capital and lead analyst at team BAD BEAT Investing
Chimera Investment Corporation (NYSE:CIM) remains a holding in my long-term dividend reinvestment income portfolios, but it’s also a name that can be traded on the swings. We have been telling members that this name is a stock to buy on any meaningful pullback. Well, friends, with the stock nearing the $8 mark, that time has come. I have mentioned this before, but back in February, I detailed why I sold half the position and was letting the house’s money run, and our team highlighted it as a pick in March when mREITs were getting obliterated. We have been following this company and the portfolio very closely for quite some time. This year of course the stock and portfolio holdings were decimated.
The prior quarter which was rocked by COVID was a complete disaster, and huge margin calls were seen in the sector in the spring. Management teams scrambled, and CIM stock was extremely volatile. Right now, our firm thinks the stock is a solid buy, especially at the $7-$8 level. When it was at $9, we thought you should wait for a dip again. Well, the dip is here, we think you can add a leg here just over $8, and fingers crossed it falls into the $7 range so you can add.
Make no mistake, this stock was once the gold-standard play in the mREIT space for years, but it like so many others has fallen on some hard times, but I suspect the future is bright. You see, once the economy normalizes and the chaos in rates/bond yields stabilizes, this stock and others in the sector will thrive. It will not happen tomorrow or next month (aside from possible trading profits) but give