Ready Capital Series E Preferred Shares: Don't Be A Hero

Binary Tree Analytics 5.84K Followers Follow Summary Ready Capital is a deeply distressed CRE REIT with 37% of its portfolio in non-performing loans. RC's preferred shares (RC.PR.E) trade at 50 cents on the dollar, reflecting severe impairment risk and potential for further losses. The company’s negative net interest income and high-risk loan book signal ongoing value erosion and possible suspension of preferred dividends. Speculative investors may consider RC's 9% Senior Notes (RCD), but RC.PR.E should be strictly avoided due to significant downside risk. J Studios/DigitalVision via Getty Images Thesis Retail investors sometimes see a high dividend yield and immediately believe it is a great time to buy. It is not always the case, and one needs to understand fully what they are getting into. More importantly, many people do not understand that This article was written by Binary Tree Analytics 5.84K Followers Follow With a banking trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for 20 years after obtaining a Finance major at a top university. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.