Cherry Hill Mortgage initiated with a Buy at Janney Montgomery Scott

Janney Montgomery Scott initiated coverage of Cherry Hill Mortgage (CHMI) with a Buy rating and $4 fair value estimate. Cherry Hill employs an agency plus mortgage servicing right investment strategy, which will deliver “superior” risk-adjusted returns on a through cycle basis, the analyst tells investors in a research note. The firm expects the company’s book value to be driven by the agency mortgage-backed security portion of the portfolio near term with the MSR investment providing substantial cash carry.