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  • Chris Mayer Investing by CODE

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    ValueWalk
    1K просмотров19 страниц
    Chris Mayer is the managing editor for Agora Financial, one of the largest publishers of independent financial advice. He is the editor and founder of Capital & Crisis, a newsletter focused on global value investing. He is the author of World Right Side Up: Investing Across Six Continents, and has appeared on CNBC and Fox News.

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    Chris Mayer is the managing editor for Agora Financial, one of the largest publishers of independent financial advice. He is the editor and founder of Capital & Crisis, a newsletter focused on global value investing. He is the author of World Right Side Up: Investing Across Six Continents, and has appeared on CNBC and Fox News.

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    1K просмотров19 страниц

    Chris Mayer Investing by CODE

    Загружено:

    ValueWalk
    Chris Mayer is the managing editor for Agora Financial, one of the largest publishers of independent financial advice. He is the editor and founder of Capital & Crisis, a newsletter focused on global value investing. He is the author of World Right Side Up: Investing Across Six Continents, and has appeared on CNBC and Fox News.

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    © All Rights Reserved
    Отметить как неприемлемый контент
    из 19

    9th annual Spring value investing congress

    April 3, 2014 Las Vegas, NV Investing by the C.O.D.E


    Chris Mayer, Agora Financial

    www.ValueInvestingCongress.com

    Investing by the C.O.D.E.

    Chris Mayer Editor & Founder, Capital & Crisis, Mayers Special Situations coffeecan@agorafinancial.com

    #1 Mortgage Servicing Rights (MSRs)


    The big picture: Banks are getting out of the mortgage

    servicing business Specialty servicers taking the slack (Ocwen, Walter, etc.) Im not recommending a servicer

    Page 2

    4/4/2014

    First, How MSRs Work


    Servicer earns a fee based on the unpaid principal

    balance (UPB)
    Basic servicing fee Excess servicing fee

    Contractual flows with interesting properties


    Page 3 4/4/2014

    Cherry Hill Mortgage Inv Corp. (CHMI)


    Unique mortgage REIT that co-invests in MSRs with

    partner Freedom Mortgage Corp.


    Freedom started in 1990 by Stanley Middleman; $13 billion in originations in 2012: $10 billion in first half of 2013 Paid most of CHMIs listing fees (went public in October) Stock is $19 7.5 mil shares outstanding Quarterly dividend is 50 cents for 10.5% yield Book is $21.50 (up 8.6% since IPO)

    Page 4

    4/4/2014

    Page 5

    4/4/2014

    After IPO
    Agency MBS (65% of assets); Excess MSRs (25% of

    assets), but majority of equity (68%) in Excess MSRs. Bought 2 pools of Excess MSRs

    Excess MSRs also helps protect book value against

    interest rate increases. (Hence, that 8.6% gain)


    Page 6 4/4/2014

    Cherry Hill
    Comps?
    HLSS (not a REIT, focuses on subprime) co-invests with Ocwen, trades ~1.3x book NRZ co-invests in excess MSRs with Nationstar (but lots of other assets too), trades for ~1.3 times book

    Upside for Cherry Hill


    Stock is $19, book value is $21.5, plus you get that 11% yield.

    Page 7

    4/4/2014

    Comparisons

    Page 8

    4/4/2014

    Second idea

    Page 9

    4/4/2014

    #2 Investing in NPLs in the EU


    EU banks sit on $1 trillion + in NPLs

    Pressure to get rid of them:


    Basel III Retrenchment Improved liquidity

    The pace will quicken

    Page 10

    4/4/2014

    Best places to be

    Page 11

    4/4/2014

    Investing in NPLs in the EU


    The big 3:
    UK Spain Ireland $226 billion $230 billion $186 billion

    Large discounts

    Page 12

    4/4/2014

    Kennedy Wilson Europe (KWE)


    February IPO raised $1.7 billion
    Kennedy Wilson, invested $200 million, is the manager

    Seed portfolio:

    NAV per share is 9.77 pounds (shares go for 1,050)


    Page 13 4/4/2014

    The Kennedy Wilson Complex


    Kennedy Wilson is the manager Basic criteria:
    KW can immediately boost the return on the property (such as in the Alliance) Good prospects for rental growth and price appreciation Where the property should benefit from on-going foreign investment in Europe

    Page 14

    4/4/2014

    A word about KW

    Page 15

    4/4/2014

    Outperformance since IPO


    KW total return of 135% since listing in November 2009

    Tells only part of the story

    Page 16

    4/4/2014

    McMorrow The O in CODE


    From the 2011 annual report:

    2009 book value per share $4.36: 2013 was $9.91


    Page 17 4/4/2014

    Summary
    #1 Cherry Hill (CHMI) #2 Kennedy Wilson Europe (KWE)
    Also Kennedy Wilson (KW)

    Review of Last Years Picks


    First Citizens (FCNCA) up 27% since Atlas Financial (AFH) up 86% since

    Contact e-mail: coffeecan@agorafinancial.com My letters:


    Capital & Crisis +17.6% annualized return since inception in January 2004 Mayers Special Situations +13.1% annualized since inception in July, 2006
    Page 18 4/4/2014

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