- At first glance Granite Point trades at an attractive price relative to book value; however, the market does not believe book value represents the true value of its loan portfolio.
- Granite Point has significant exposure to the commercial real estate market which is under significant stress now due to Covid-19.
- A sensitivity analysis is presented that shows the importance of truly understanding the impact current trends have on Granite Point's book value.
- Until there is more clarity on book value and positive direction in commercial real estate values, I recommend that investors avoid Granite Point at this point in the commercial real estate cycle.
For further details see:
Granite Point Mortgage Trust: The Market Is Skeptical Of Book Value And So Am I