Weekly Series: mREIT And BDC Recommendations (And Price Targets) As Of 07/20/2025

Summary

• Earnings season is ramping up.
• Scott reduced his position in GBDC to lock in a portion of the gains amid a pricey BDC sector and ongoing tariff and economic risks.
• CWMF is also still long GBDC, but may look to reduce or close position following Scott's trade. Any action will depend on valuations.

In the exclusive section for full members:

• Recent NYMT acquisition of Constructive Loans could boost earnings and may warrant a recommendation upgrade pending Q2 results.
• See note number 10 within this article for more detail. They are in numerical order and each note starts with a number. You can also search for "10)".
• All of the current ratings and price targets, as we do each time we publish this article.
• The Q2 2025 estimates for earnings and book values (or net asset values for BDCs).
• The dividend projections for each mREIT and BDC for Q3 2025.

We aim to retain the same layout from week to week. I hope that makes it easier to find the parts that are most relevant to you.

Weekly Notes From Colorado Wealth Management Fund

Positions: 0 trades this last week.

Commentary: Earnings season is getting underway. No big changes or new things to worry about over the last week. Could see interesting announcements as the earning season ramps up. Given Scott’s recent trade in GBDC, I may place a similar trade.

Scott’s Ultra-Brief Summary

“Another fairly quiet week for both mREIT BVs + BDC NAVs. If anything, a very slight - slight decrease in a majority of agency + hybrid mREIT BVs. I added my typical upcoming weekly earnings report dates for both sectors near the top of the text. I also included a brief, couple paragraph discussion on NYMT's recent acquisition at the end of the text (#10). It is going to be a pretty busy upcoming week on my end with earnings (especially Monday).”

Weekly Notes From Scott Kennedy

Positions: 1 trade over the past week.

On 7/15/2025, I sold 30% of my GBDC position at a weighted average sales price of $15.350 per share. I used FIFO when computing this sale. I wanted to monetize the recent stock/BDC rally to "lock in" a fairly decent total return (which includes all dividends received) in GBDC within this block. I also wanted to have more/additional capital to invest as events play out if/when markets reverse course and move lower in the future. I am continuing to monitor markets. While GBDC is "technically" within my/our appropriately valued range, the BDC sector as a whole is getting a bit pricey and this sale/strategy takes that into consideration. Overall, I am still a bit cautious regarding the BDC sector as a whole regarding the tariff situation and the potential impact to the U.S. economy. This also factors in modeled future monetary policy (have had a lower allocation to this sector for a while now). I have no immediate plans on selling my remaining GBDC position (unless the price moves close to $16). I would likely increase my GBDC position again if the stock moved back into my/our undervalued classification (likely starting around $14.50).   

In general, I am being patient regarding selectively deploying capital in attractively-valued mREIT common stocks with a less attractive risk/performance rating.  My sector allocation to mREIT common stocks remains high (thus aligning with continuing to hold existing positions and selectively adding for future appreciation over the long-term).  Patience remains key as catalysts/events will take time to play out (especially within commercial/multifamily mREITs).  I will continue to remain disciplined regarding “picking and choosing” investments and lot sizes.

Next Week Earnings Report Dates for All Covered mREIT and BDC Stocks:

• Monday Pre-Market Open: DX
• Monday Post-Market Close: AGNC
• Tuesday Post-Market Close: PMT
• Wednesday Post-Market Close: NLY
• Thursday Post-Market Close: ORC

As a reminder, since ORC already provided preliminary earnings results (and we provided an earnings assessment article), we will not be providing additional commentary on this mREIT on Thursday.  Out of the stocks listed above, DX and AGNC will likely have an earnings assessment article provided Monday night.  PMT will likely have an earnings assessment article provided Tuesday night. NLY will likely have an earnings assessment article provided Wednesday night.  In addition, ARR is likely reporting sometime next week (an “official” date has not been provided yet).  ARR will likely have an earnings assessment article provided Thursday night if they report next Wednesday or Thursday.

BDC Weekly Change: For the 2nd straight week, high yield/speculative-grade credit spreads were relatively unchanged.  If anything, very slight widening.  June’s 2025 Consumer Price Index (“CPI”) report (inflation indicator) came in largely as anticipated by markets (with some revisions to the prior month).  As of late July 2025, we have continued to see a decent retracement in high yield/speculative-grade credit spreads after a very volatile April 2025.  This is mainly due to continued optimism regarding tariff negotiations and semi-attractive economic data (inflation remaining fairly subdued, relatively flat unemployment rate, etc.).  Spreads have very slightly tightened during calendar Q3 2025 (through 7/18/2025).  

BDC Other Comments (Current Week):