Over the weekend, I was doing some screens and found [[CMO]]. With the word “mortgage” in the company name, one would think the stock would be getting killed. But, it is thriving.
Plain and simple, 99% of CMO‘s holdings are Gov’t agency bonds. As rates go lower and the spreads widen, they bank even more coin.
Also, because they have REIT status, the company will pass the extra coin to you (leech investor).
During the last rate cut cycle, CMO went from $8-34, while paying off loads of dividends.
Barring armageddon, CMO can be an interesting play, as rates drop.
Over the next week, I will highlight stocks on my radar, in order to help you understand how men with greater intelligence operate.