The fund he manages, Schneider Small Cap Value Fund went from the best to the worst during the past four year. He buys companies he considers cheap and with market cap typically less than $3 billion. He strategy worked really well from 1999 to 2006, during the time he outperformed S&P500 by a large margin, then 2007 and 2008 set in, and he find himself had a wrong hand of cards… The stock market put many investment strategies and the money managers behind them at test. GuruFocus does consider the performances when we select which money manager as Investment Guru, and we do that using long term performance.
Performance of Schneider Small Cap Value Fund
| Year | Return (%) | S&P500 (%) | Excess Gain (%) |
|---|---|---|---|
| 2008 | -45 | -37 | -8.0 |
| 2007 | -17.08 | 5.61 | -22.7 |
| 2006 | 21.08 | 15.79 | 5.3 |
| 2005 | 9.83 | 4.91 | 4.9 |
| 2004 | 27.23 | 12 | 15.2 |
| 2003 | 106.5 | 28.7 | 77.8 |
| 2002 | -14.85 | -22.1 | 7.2 |
| 2001 | 19.37 | -11.9 | 31.3 |
| 2000 | 17.2 | -9.1 | 26.3 |
| 1999 | 47.07 | 21 | 26.1 |
And it appears Arnold Shneider is on his way to mend. His Shneider Small Cap Value fund is up 48% YTD. Good he needs that to recoup the losses that incurred during the past two years. Wherever you fall, you get up. Thanks go to the heavy weighting on financials, technology, and basic material. Check out his portfolio and asset allocation here .
What caught my eyes is the high dividend issues that is in his portfolio. I was on a mission to find who has the highest yield stocks among the Gurus we track and I find he has a collection of interesting stocks. Here is the list:
Anworth Mortgage Asset Corp. (ANH) -- Yield = 16
Anworth Mortgage Asset Corp. was formed to invest in mortgage assetsincluding mortgage pass-through certificates collateralized mortgageobligations mortgage loans and other securities representing interests in or obligations backed by pools of mortgage loans which can be readily financed and short-term investments. The Company intends to acquire mortgage assets primarily in the secondary mortgage market through its manager Anworth Mortgage Advisory Corporation. Anworth Mortgage Asset Corp. has a market cap of $857.7 million; its shares were traded at around $7.97 with a P/E ratio of 7 and P/S ratio of 3. The dividend yield of Anworth Mortgage Asset Corp. stocks is 16%. Anworth Mortgage Asset Corp. had an annual average earning growth of 21.9% over the past 5 years.
Schneider held the stock since 2005. As of 2Q09, he held 1.7 million shares.
MFA Mortgage Investments Inc. (MFA) -- Yield = 12.7
MFA Mortgage Investments Inc. operates as a real estate investment trust primarily engaged in the business of investing in mortgage-backed securities. The company also has indirect investment in Lealand Place a multifamily apartment property located in Lawrenceville Georgia. In addition it provides investment advisory services to a third-party institution with respect to their MBS portfolio investments. Mfa Mortgage Investments Inc. has a market cap of $2.15 billion; its shares were traded at around $7.88 with a P/E ratio of 8.3 and P/S ratio of 5.3. The dividend yield of Mfa Mortgage Investments Inc. stocks is 12.7%. Mfa Mortgage Investments Inc. had an annual average earning growth of 17% over the past 5 years.
Schneider held 1.2 million shares in 2Q09, down slightly from a quarter before.
Annaly Capital Management Inc. (NLY) -- Yield = 12.6
Annaly Mortgage Management Inc. specializes in investing in Mortgage-Backed Securities. Its principal business objective is to generate net income for distribution to stockholders from the spread between the interest income on its Mortgage-Backed Securities and the costs of borrowing to finance its acquisition of Mortgage-Backed Securities. The Company has elected to be taxed as a Real Estate Investment Trust and is self-advised and self-managed. Annaly Capital Management Inc. has a market cap of $10.36 billion; its shares were traded at around $19.03 with a P/E ratio of 8.7 and P/S ratio of 4.4. The dividend yield of Annaly Capital Management Inc. stocks is 12.6%. Annaly Capital Management Inc. had an annual average earning growth of 15.2% over the past 5 years.
Shcneider owns 4.3 million shares in 2Q09. He owned the stock since 2005.
WINTHROP REALTY TRUST (FUR) -- Yield = 10.2
Winthrop Realty Trust is a Boston-based real estate investment trust. Its principal business activity is investing in and making loans secured by real estate assets. Its management team is composed of individuals whose careers have been devoted to value-oriented opportunistic real estate investing. Management seeks to earn high risk-adjusted returns by targeting for acquisition significantly undervalued assets. In many cases these assets are underperforming at the time of acquisition and we perceive that through an infusion of capital and improved management an appropriate return on investment can be realized. Consequently with certain limitations they are willing to invest in most any type of real estate asset or security. Winthrop Realty Trust has a market cap of $155.7 million; its shares were traded at around $9.82 with a P/E ratio of 6.3 and P/S ratio of 3.4. The dividend yield of Winthrop Realty Trust stocks is 10.2%.
Schneider owns 256,063 shares as of 2Q09, up slightly for the quarter.
CHIMERA INVESTMENT CORP COMMON STOCK (CIM) -- Yield = 8.1
Chimera Investment Corporation are a newly-formed specialty finance company that will invest in residential mortgage loans residential mortgage-backed securities real estate-related securities and various other asset classes and intends to elect and qualify to be taxed as a real estate investment trust or REIT for federal income tax purposes. Chimera Investment Corporation will be externally managed by Fixed Income Discount Advisory Company a wholly-owned subsidiary of Annaly. Chimera Investment Corp Common Stock has a market cap of $2.67 billion; its shares were traded at around $3.98 with a P/E ratio of 9.4 and P/S ratio of 59.6. The dividend yield of Chimera Investment Corp Common Stock stocks is 8.1%.
Schneider owns 1.5 million shares of the stock, up sharply from a quarter before.
Conclusion
Mortgage investment companies, typically organized as a REITS borrow short term and buys mortgages and/or mortgage backed securities. The asset they buy are typically guaranteed for payment by FNM and FRE, both of which are as a matter of fact in the hand of the government.
The cost of funds for these companies are low, and the spread of short and long rate are high, that is why these companies are doing relatively well and the dividend yield are so high, some of them are double digit.
You can look into these companies but be warned the companiesare rather cyclical. They tend to move with the interest spread.
Schneider found a nitch, for now.
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User Comments:
1. James Nyka says on Sep 25, 2009 at 11:59 PM:
What an unbelievably informative web site. Succinct, bs free. Very impressive, very professional.
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2. Guruek says on Sep 26, 2009 at 9:26 AM:
James,
Thanks for the kind words. We certainly strive to do our best.
Try our premium membership, you will be delighted that you did.
Thanks for the kind words. We certainly strive to do our best.
Try our premium membership, you will be delighted that you did.
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