Reddskin
Aug 11, 4:17 PM
$MITT because MITT’s stock is currently trading at a huge discount to book, the fact that MITT is using stock rather than taking on a large amount of corporate debt is strategically important.
My bottom line
At
$6.32, I would characterize MITT as:
Current price: ~
$6.32
Current book:
$10.00
Estimated post-merger book: ~
$9.40–
$9.70
Current P/B: 0.63× current book
Potential normalized P/B: 0.80–0.95×
My base-case value: **
$7.50–
$8.75**
Bull case:
$9–
$10.50+
The biggest catalyst isn’t the increase in float. It’s whether MITT can demonstrate that the enlarged equity base +
$CHMI MSR business +
$7–9M of synergies actually produce higher EAD per share.
If they do, the current ~0.63× book valuation looks very cheap!
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