DailyTrends.com Small Cap Update: Sunset Financial (SFO) REVISITED
|Sign up here
for a complimentary two week trial in which you get
access to great analysis and commentary that you can profit from. Whether it be day
trading picks or finding undiscovered gems in small caps, DailyTrends.com is the place
where self-guided investors learn more and make more.
For full disclosure purposes, I personally bought more shares of this stock last week. In my opinion, the stock is cheap at these levels and will be looking to add in the coming weeks ahead.
Sunset is a mortgage REIT that in my opinion is undervalued. It is currently trading at nearly a 17% discount to its approximate current N.A.V. (Net Asset Value)
The company went public last year at $13.00 a share ostensibly as a dividend vehicle for conservative investors, but due to the ineptness of management, the shares now trade at a giant discount to true value.
Management owns only 2-3% of the shares---and takes proportionately high fees which reduce the net income for shareholders. With all that said, they still earned a net of approximately .15/share each of the last two quarters.
However, I find that the most significant thing to note is the fact that OVER 80% of the stock is controlled by funds/institutions and arbitrageurs.
In reality, several very large shareholders and known shareholder activists have express extreme displeasure with the current state of affairs in their filings and perhaps are greatly pressuring the company to either sell itself or have management removed as soon as possible. With either event, the gap between the discount and the NAV would probably nearly be erased, as with proper management the company could easily earn upwards of $1.00/share per year as a REIT and provide a VERY attractive dividend return for investors.
In my eyes, the stock is worth at least $11 a share, on the true underlying value of its assets.
will be available to take your questions until Monday, December 19. Please use the form below to submit your questions.