MITT

MITT is a non-agency residential mortgage REIT externally managed by a TPG/Angelo Gordon affiliate, sourcing loans through its ~66%-owned originator Arc Home and terming them out via TPG's securitization platform (three rated deals on $1.5B of Home Equity Loans in 2025). The investment case is a valuation one, not a growth one: the stock trades at $7.68 against a stated book value of $10.48 per share — a ~27% discount — and pays a dividend the company can currently cover. Management declared $0.85/share in 2025 (up 13.3% from $0.75) against $0.86 of Earnings Available for Distribution, so at today's price the ~11% yield is funded by operations rather than return of capital. That discount-to-book plus a covered double-digit yield is the reason to own it.

The fundamentals, though, are softening, which is why this is a hold and not a buy. FY2025 net income fell 12.7% to $48.7M and diluted EPS dropped 26.8% to $0.90, with part of the per-share decline driven by a 7% rise in share count — the August 2025 issuance of ~2.0M shares to buy an additional 21.4% of AG Arc. ROE is a modest 8.7% and the accumulated deficit sits at -$500M. Balance-sheet posture is aggressive: liabilities/equity of 14.5x (the filing's 14.4x GAAP leverage), which is normal for the sector but leaves the equity highly sensitive to credit spreads and prepayment/rate moves. Cash was cut in half to $57.8M as the portfolio grew (total assets +26% to $8.71B), so the liquidity buffer is thinner even as the balance sheet expanded.