Why Fortress Investment Group is Surging

Fortress Investment Group is an investment manager with more than $70 billion in real estate assets. The organization has over 1,600 major investor clients and offices in New York, Philadelphia, Los Angeles, Singapore, Italy, and Hong Kong. Founded in 1998, the firm went public in 2007. In 2014, Fortress sold its stake in the Stuyvesant Town Peter Cooper Village apartment complex for $5.3 billion. The company acquired CWCapital in 2010 in order to move deeper into commercial real estate. Today, Fortress Investment Group’s holdings include the Inverness Corners retail center in Alabama.Today, shares in Fortress are surging. This has been somewhat of a surprise since the hard hit the company took during the economic calamity of 2008. Nevertheless, the company is reasserting itself as a major contender. Here’s why. Fortress Investment Group shares are trading higher by roughly 29%.The spike happened after the company announced that is is to be acquired by the Japanese conglomerate, SoftBank.

Shareholders can expect to collect $8.08 per share, a 39% premium to the closing price- and they may receive two more quarterly dividends prior to closing, bringing the total to $8.26 per share.Fortress executives are committed to staying with the company, having signed a five-year contract and plan to invest 50% of their after-tax proceeds into investment products managed by Fortress.Fortress Investment Group went public in 2007 at $18.50 per share, doubling to trade at $35 at market open. Their IPO benefited from fortuitous timing, capitalizing on the market enthusiasm for anything related to finance. With 34.99% ownership among the company’s top execs, Fortress’ leadership are confident that the deal will receive sufficient support from shareholders. At $7.98 per share, the company trades at a 1.2% discount. Including two dividends, the discount widens to 3.4%.According to the DividendRank formula, Fortress Investment Group currently has an excellent rank well within the top 25% of competing firms. This suggests that it is among the top most attractive investment business models.

Making Fortress Investment Group even more interesting is the fact that shares of FIG entered oversold territory, exchanging at rates as low as $5.13 per share.The RSI reading has hit 28.9 — comparatively, the universe of dividend stocks as reported on by Dividend Channel has an average RSI of 48.6. All else being equal, falling stock price creates better opportunities for dividend investors to obtain a higher yield. FIG’s recent annualized dividend works out to annual yields of 6.11% based on the $5.24 share price. Bullish investors might look at FIG’s RSI readings as a strong sign that the heavy selling they’ve enjoyed is in the process of coming to an encouraging conclusion, and that they will begin to look for entry points on the buy-in side. Among the cardinal data points that dividend investors should investigate in order to decide whether or not they are bullish on FIG is its unique dividend history. Dividends are not generally always predictive; but, looking at Fortress Investment Group’s encouraging recent history might help to convince investors that the recent dividend has a promising future.