5 Best Stocks to Buy According to Ron Mass’ Almitas Capital

4. MFA Financial, Inc. (NYSE:MFA)

Almitas Capital’s Stake Value: $9,673,000

Percentage of Almitas Capital’s 13F Portfolio: 5%

Number of Hedge Fund Holders: 15

MFA Financial, Inc. (NYSE:MFA) was the only stock among Almitas Capital’s top 10 stocks in which the fund had initiated a stake during the second quarter. Like several other top stock picks of Almitas Capital, MFA Financial, Inc. (NYSE:MFA) is also a mortgage REIT and boasts an unusually high dividend yield. The company made it to Insider Monkey’s list of 5 Penny Stocks that Pay Dividends in January. However, it went for a 1 for 4 reverse stock split in April this year which took it out from the penny stock zone. Nonetheless, it still made it to our 5 Best Dividend Stocks on Robinhood list published in June.

A large part of MFA Financial, Inc.’s (NYSE:MFA) unusually high dividend yield of 15.75%, which it currently sports, can be attributed to its stock price movement over the past many quarters. MFA Financial, Inc.’s (NYSE:MFA) stock has lost 42% and around 70% of its value over the past one and five years, respectively. This stock price decline, nonetheless, has made the stock considerably cheap from a valuation perspective. It currently trades at a trailing non-GAAP price to earning multiple of 4.9 and a price to book multiple of only 0.52.