"AG Mortgage Investment Trust, Inc. (MITT): Among the Cheap Growth Stocks to Buy Now"

In the ever-evolving landscape of the stock market, finding growth stocks that offer both value and income potential can be a daunting task. However, one company that stands out as a beacon of opportunity is AG Mortgage Investment Trust, Inc. (MITT). This residential mortgage REIT has been making waves with its strategic acquisitions, strong financial performance, and attractive dividend policy. Let's dive into why MITT is among the cheap growth stocks to buy now.

A Diversified Portfolio for Growth

MITT's investment strategy is centered around a diversified portfolio of residential mortgage-backed securities (RMBS) and other real estate-related assets. This includes non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. This diversification allows MITT to capitalize on various market opportunities and mitigate risks associated with any single asset class.

One of the key highlights of MITT's strategy is its ability to leverage the support and power of its external manager, TPG. This has enabled MITT to be nimble in asset allocation, seamlessly rotating in multiple flavors of non-agency credit to seize strategic market opportunities. For instance, the WMC acquisition has been a resounding success for shareholders, demonstrating MITT's agility in adapting to market conditions and seizing opportunities for growth.

Strong Financial Performance

MITT's recent financial performance is a testament to its strategic prowess. In 2024, the company reported a 37.53% increase in revenue, reaching $87.55 million, and a 2.66% increase in earnings to $36.38 million. This strong financial performance positions MITT favorably in the market, with analysts giving it an average rating of "Buy" and a 12-month stock price forecast of $8.4, which is an increase of 12.15% from the latest price.

Attractive Dividend Policy

One of the most compelling reasons to consider MITT is its attractive dividend policy. The company recently declared a $0.19 per common share dividend for the fourth quarter of 2024, reflecting its strong financial performance and commitment to returning value to shareholders. This dividend policy aligns well with MITT's growth prospects, providing income-focused investors with a reliable income stream. With a yield of 9% from baby bonds, MITT offers high income with some capital risk, making it an attractive option for those seeking steady returns.

Potential Risks and Mitigation Strategies

While MITT's investment strategy and financial performance are impressive, it's essential to consider the potential risks. One significant risk is the volatility in interest rates, which can impact the performance of mortgage-backed securities. Additionally, the potential for defaults on the residential and commercial loans in MITT's portfolio poses a risk. However, MITT's use of leverage, as indicated by its 11.6x GAAP Leverage Ratio and 1.4x Economic Leverage Ratio, increases its exposure to market risks and could amplify losses during economic downturns.

To mitigate these risks, MITT has implemented several strategies. The company's diversification across various asset classes helps to spread risk, and its strategic acquisitions, such as the WMC acquisition, have been successful in driving growth. Furthermore, MITT's commitment to growth initiatives and active management positions it well to navigate market challenges.

Conclusion

In conclusion, AG Mortgage Investment Trust, Inc. (MITT) is among the cheap growth stocks to buy now. Its diversified portfolio, strong financial performance, and attractive dividend policy make it an appealing option for income-focused investors. While there are potential risks, MITT's strategic acquisitions and active management position it well to navigate market challenges and continue its growth trajectory. For investors seeking a reliable income stream with growth potential, MITT is a stock worth considering.