REM's Holdings Could Mean 10% Gain Potential

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the iShares Mortgage Real Estate Capped ETF ( REM), we found that the implied analyst target price for the ETF based upon its underlying holdings is $11.33 per unit.

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With REM trading at a recent price near $10.32 per unit, that means that analysts see 9.80% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of REM's underlying holdings with notable upside to their analyst target prices are Dynex Capital, Inc. ( DX), Ellington Residential Mortgaging Real Estate Investment Trust ( EARN), and Invesco Mortgage Capital Inc. ( IVR). Although DX has traded at a recent price of $6.52/share, the average analyst target is 13.11% higher at $7.38/share. Similarly, EARN has 11.34% upside from the recent share price of $12.35 if the average analyst target price of $13.75/share is reached, and analysts on average are expecting IVR to reach a target price of $16.35/share, which is 10.85% above the recent price of $14.75. Below is a twelve month price history chart comparing the stock performance of DX, EARN, and IVR:

DX, EARN, and IVR Relative Performance Chart

Below is a summary table of the current analyst target prices discussed above:

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