Deerfield Triarc Revisited

I am basically at breakeven, and above my tough rebalancing buy in August.   I bought lower as well.  My view is that Deerfield returns to book value ($13) or above, because the market for prime and AAA whole-loan mortgage backed securities is improving.

It would not surprise me to hear that repo margins return to prior levels, which would benefit Deerfield Triarc.  The market for low risk mortgage collateral has returned.

There is disagreement over whether the merger with the asset manager is a good thing or not.  I favor the merger, because I think CDOs have a future.  That said, if it happens or not, I won’t be harmed much.

My view is this: at 73% of book, there is significant value to obtain here.  The company is not going broke.  I will only sell my full stake when the company trades over book.

Full disclosure: long DFR