Top Bulls Reasons To Buy — Vote below!

Add a New Bulls Reason

Company: Hatteras Financial (HTS)
Current price:
Headline: (100 character max)
Analysis:
Cancel
100%
agree
9 votes

  One of the safer investments in 2009

The idea is pretty straightforward. These businesses simply earn the interest "spread" like a bank... But importantly, they're not banks. They don't have teller machines, or buildings, or even many employees. But they do earn an interest spread. So I call them "virtual banks."

Right now, these virtual banks are earning a huge amount of money.

The government is keeping short-term interest rates low, so these virtual banks can borrow at a low rate of interest. But interest rates on the government-guaranteed investments they buy have still not come down, so they can earn a high rate of interest for a safe investment. We're in the "sweet spot" for virtual banks.

They can pay 19% dividends or more in 2009, based on current share prices. And they're all trading at just five times forward earnings! They all trade pretty close to book value, too.

(100 character max) Cancel
100%
agree
3 votes

  16.7%!

A 16.7% yield with relatively low risk is attractive in this market. Rising short-term rates are a risk, but warning signs should be visible to the wary before rates rise.

(100 character max) Cancel
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki