Rocketman

Five OAKS Investment Plan: 9 year Buy and Hold Period

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NYSE:OAKS   None
6
I bought this stock.

Plan: 9 year fundamental buy and hold plan

Conditions: Five OAKS Investment is a hybrid mortgage real estate investment trust (REIT). These types of mREITs are more diversified than traditional mREITs, which focus on residential or commercial mortgage-backed securities. Instead, mREITs like Five OAKS invest in many different vehicles.

Five OAKS, in 2015, was in the middle of the recovery phase of the US business cycle from the bear market back in 2008. Thus, they were lowering their dividends as earnings from the whole crises put pressure on the company. As it reduced its exposure to non-agency RMBS, it increased is exposure to agency RMBS; the majority (96%) of which are agency hybrid ARMs. Because of this, and because of the nature of ARMs as short-term (3-5year) instraments, in a rate hike environment, and given the capable management team, despite the fact that mREITs have harder times in a rate hike environment, Five OAKS has put itself in a position to prosper in this environment. Profits, earnings and dividends shall increase for both the company and its shareholders. Because of this, I believe that the company's stock will be a magnet for future potential buyers of both institutional quality going forward.

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