I recently addressed the significant drop in book value that one could expect on Capstead Mortgage (CMO), essentially due to hedge ineffectiveness and a particularly strong sell-off in hybrid ARM valuations in this article. In this other article, I also looked into American Capital Agency Corp.'s (AGNC) expected book value, dropping less than expected thanks to hedge effectiveness and the composition of their book.
As it turns out, CMO is not alone with a bad surprise potential. In this article, I show why one should also be expecting a significant drop in book value for Hatteras Financial (HTS), in the order of 20%. HTS is currently trading around 23.15, while I would...
Only subscribers can access this article, which is part of the PRO research library covering 3,588 different stocks.
Growing numbers of fund managers and other investment professionals subscribe to Seeking Alpha PRO for equity research that is unavailable elsewhere, so they can: