Cherry Hill Mortgage Investment’s Q4 2023 Updates By Scott Kennedy
Read our latest research at The REIT Forum. Michael Vanloon and Scott Kennedy offer insights into today's key investment trends.
Finding Our Positions
I posted a subscriber-exclusive article with links to our Google Sheets. You can always access our positions there. Scott’s positions are updated each week. CWMF’s positions are usually updated on the same day as the trade.
Summary
This 25th (and final) earnings assessment article reviews CHMI’s BV and core earnings performance during Q4 2023.
CHMI’s BV was a notable underperformance while its core earnings matched my/our expectations.
A largely “as expected” quarter regarding CHMI’s valuation fluctuations (MBS, derivatives, and MSRs). However, a notable surprise during the quarter was CHMI’s large equity dilution.
I/We already have CHMI valued at the largest discount in the agency mREIT sub-sector. A bit of a silver lining was CHMI’s slight quarterly improvement in core earnings/EAD.
As such, no change in CHMI’s percentage recommendation ranges or risk/performance rating (still a 4.5). CHMI is currently deemed appropriately valued (HOLD).
Introduction:
Hi subscribers. For new members, my name is Scott Kennedy and currently I fully cover 20 mortgage real estate investment trust (mREIT) and 15 business development company (“BDC”) common stocks within this Investing Group regarding research/data, subscriber questions, weekly projected book values/net asset values (BV/NAV), and common stock recommendation ranges. Colorado (“CO”) Wealth Management handles the mREIT preferred stocks and he and his team handles all other applicable REIT sectors outside the mREIT sector. CO also provides some mREIT common stock and BDC articles from time-to-time which are more of an “overview/introduction” discussion; typically based either on my or our combined research/data. This also includes some macroeconomic trends and data. My name is always attached to all Investing Group articles I personally wrote so there is no confusion for subscribers.
This REIT Forum article is part of a series of articles over a span of 6-7 weeks which will analyze my previously projected BV/NAV and core earnings (or core earnings equivalent)/net investment income (“NII”) figures and compare these metrics to each mREIT’s and BDC’s actual reported results, respectively. For readers who are familiar with my public mREIT and/or BDC articles, these types of articles are beneficial to readers who desire to pursue a more active investing strategy and/or want more “real time” thoughts/analysis.
I hope my services/contributions ultimately help enhance a subscriber’s total investment returns or minimize their total investment losses within the mREIT and BDC sectors. At the very least, I hope subscribers will gain more insight into the mREIT and BDC sectors by reading my/our exclusive REIT Forum articles.
1) CHMI’s BV and Core Earnings Q4 2023 Performance (Projected Versus Actual Results):
On 3/7/2024, Cherry Hill Mortgage Investment Corp. CHMI 0.00%↑ reported the company’s earnings results for the fourth quarter of 2023. Table 1 below provides CHMI’s BV and earnings summary.
Table 1 – CHMI Q4 2023 BV and Earnings Summary