Opinions
The Panic-Proof Portfolio (Stockchase Research)
Angel Oak Mortgage REIT Inc.
AOMR-N
TOP PICK
Mar 18, 2025
Stock price when the opinion was issued
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AOMR invests in first lien mortgages not qualified for conventional financing within the US. It provides a tax effective distribution combed with a return of capital. As such its robust dividend has a high payout ratio. We like that cash reserves are holding steady as the company aggressively retires debt. It trades at 8x earnings, under book value and supports a ROE of 29%. We recommend setting a stop-loss at $8.00, looking to achieve $12.50 -- upside potential of 21%. Yield 12.5%
(Analysts’ price target is $12.21)Our PAST TOP PICK with AOMR has triggered its stop at $9. To remain disciplined, we recommending covering the position at this time. When combined with our previous guidance, this will result in a net investment loss of 10%.
We reiterate this first mortgage company as a TOP PICK. Interest revenues grew 30% over the year. The company was able to offer 5 securitized offerings over the year - bettering their goal of one per quarter. It trades at 8x earnings, at book value and supports a ROE of 11%. We recommend trailing up the stop (from $8) to $9, looking to achieve $12 — upside potential of 20%. Yield 7.6%
(Analysts’ price target is $12.04)