American Capital Agency Reports An Excellent FY 2012, With A 32% Total Economic Return [View article]
getbeach,
I own CYS since I believe it is the "cheapest" mREIT. However, cheap stocks can get cheaper, and CYS did indeed get cheaper after earnings.
I might go long AGNC after it goes ex-div. Though, I would rather it trade at more of a discount to book value. However, it may not, since its higher yield is boosting the share price.
Ex-div days are a great judge of demand for a stock, if it recovers most of the losses, that means there is strong demand, if it does recover and instead falls more than the dividend, than there is weak demand.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
I was actually asking myself that same question. After looking at a few reports, it seems that certain types of mortgages have higher CPRs than others. For example, the 15yr CPR is quite high for the mREITs I cover, even AGNC. Also, higher interest rate loans obviously have higher CPRs. AGNC has been dodging some CPR by buying low balance and "HARP" loans, since these tend to not be refinanced as often.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
jomomo,
I agree partly with your assessment. I do think that investors are leaving CYS due to the lower expected dividend. However, I think CYS is a bargain at a 10% discount to BV. I think of CYS as a value play with a dividend kicker.
American Capital Agency Reports An Excellent FY 2012, With A 32% Total Economic Return [View article]
Hi punter18,
I also think that the market has already priced out a dividend reduction for AGNC. The stock is already trading above book, which is quite a feat concerning that almost all its peers are trading below BV. AGNC use of "dollar roll income" seems to have impacted the leverage used by AGNC. I would suspect that this would effect AGNC in the case of any interest rate "shocks".
On CYS,
I was quite surprised by the market reactions after it reported earnings. I actually thought they were not that bad. BV declined, but at a similar rate as other agency mREITs (except for AGNC). After reading some of the analyst downgrades, it seems they are most worried about CPR and spread compression. For CPR, CYS has 60% of its portfolio in 15yr fixed mortgages. These have about a 16% CPR for CYS. For comparison, AGNC saw 15% and NLY saw 24%. As for the spread, CYS has an average yield on assets of under 2%. Again, this seems due to the lower yields on the 15yr fixed mortgages. It seems like CYS is settling for a lower yield, however, investors seem to want a higher yield, hence the reduced share price.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
Reim,
CYS and DX should have interest rate sensitivity tables in the paper work that they file to the SEC for the quarter. These tables should show estimates on how much of an impact interest rate shocks have on the NAV (book value).
I also added to CYS. I have been buying shares at under book value. I think that from now until the dividend announcement, CYS will be range bound.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
CYS has over 60% ($11B) of its portfolio in 15 Year Fixed Rate mortgages. If you look at AGNC's CPR numbers, you will see that they have similar CPRs on sub 15yr mortgages, with CYS at 16.1% and AGNC at 15%. AGNC is actually adopting the "drop income" tactic used by CYS. Also, most every agency mREIT saw BV declines. Only the non-agency mREITs saw BV increases.
More on American Capital Agency (AGNC) Q4 earnings: Book value of $31.64, down 2.6% from Q3. As comparison Annaly BV dropped 4.5%, CYS by 7.9%. 7.0X leverage as of Dec. 31. Net interest spread rises 24 bps to 1.63, management taking advantage of favorable financing in the TBA dollar roll market. 2.7M shares repurchased (less than 1% of the float) at average of $29/share. Shares off a hair AH. (PR) [View news story]
This market current is, quite frankly, wrong and misleading. CYS saw a 4.5% NAV decline when you adjust for the year end special dividend of $0.52.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
AT has new cash flow coming online in 2013 that replaces most if not all of the FLA cash flow. Also, they will use the proceeds from the sale to pay off debt. Q4 earnings should provide more insight into this issue.
More on CYS Investments (CYS) Q4 earnings: Net asset value of $13.31/share falls from $14.46 in Q3, thanks to $0.52 special dividend and sliding RMBS prices. Company had a GAAP loss of $0.24/share thanks to the drop in RMBS prices. Net interest spread declines to 1.08% from 1.41%. 15-year fixed agency MBS continues to make up more than 50% of holdings. (PR) [View news story]
American Capital Agency Offers A 16% Yield And A 3% Discount To Book Value [View article]
The 1.36 number came from a pdf from AGNCs website. I am not sure why there was a difference. I already own a stock in this sector (CYS), so I will not be adding AGNC. However, if I didn't own CYS, I would probably own AGNC. They have a great team.
Intel At $21 Is An Excellent Income Stock At An Excellent Price [View article]
I agree that INTC will be a great dividend AND growth stock. I also think shares right now are pretty inexpensive.
However, I think that 2013 will be more of an "investment" year for INTC, and.that INTC will only offer a token dividend increase this year.
American Capital Agency Reports An Excellent FY 2012, With A 32% Total Economic Return [View article]
I own CYS since I believe it is the "cheapest" mREIT. However, cheap stocks can get cheaper, and CYS did indeed get cheaper after earnings.
I might go long AGNC after it goes ex-div. Though, I would rather it trade at more of a discount to book value. However, it may not, since its higher yield is boosting the share price.
Ex-div days are a great judge of demand for a stock, if it recovers most of the losses, that means there is strong demand, if it does recover and instead falls more than the dividend, than there is weak demand.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
I agree partly with your assessment. I do think that investors are leaving CYS due to the lower expected dividend. However, I think CYS is a bargain at a 10% discount to BV. I think of CYS as a value play with a dividend kicker.
American Capital Agency Reports An Excellent FY 2012, With A 32% Total Economic Return [View article]
I think AGNC will find a way to make money in any interest rate environment.
American Capital Agency Reports An Excellent FY 2012, With A 32% Total Economic Return [View article]
I also think that the market has already priced out a dividend reduction for AGNC. The stock is already trading above book, which is quite a feat concerning that almost all its peers are trading below BV. AGNC use of "dollar roll income" seems to have impacted the leverage used by AGNC. I would suspect that this would effect AGNC in the case of any interest rate "shocks".
On CYS,
I was quite surprised by the market reactions after it reported earnings. I actually thought they were not that bad. BV declined, but at a similar rate as other agency mREITs (except for AGNC). After reading some of the analyst downgrades, it seems they are most worried about CPR and spread compression. For CPR, CYS has 60% of its portfolio in 15yr fixed mortgages. These have about a 16% CPR for CYS. For comparison, AGNC saw 15% and NLY saw 24%. As for the spread, CYS has an average yield on assets of under 2%. Again, this seems due to the lower yields on the 15yr fixed mortgages. It seems like CYS is settling for a lower yield, however, investors seem to want a higher yield, hence the reduced share price.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
CYS and DX should have interest rate sensitivity tables in the paper work that they file to the SEC for the quarter. These tables should show estimates on how much of an impact interest rate shocks have on the NAV (book value).
I also added to CYS. I have been buying shares at under book value. I think that from now until the dividend announcement, CYS will be range bound.
The Recent Decline In CYS Investments Is A Buying Opportunity [View article]
More on American Capital Agency (AGNC) Q4 earnings: Book value of $31.64, down 2.6% from Q3. As comparison Annaly BV dropped 4.5%, CYS by 7.9%. 7.0X leverage as of Dec. 31. Net interest spread rises 24 bps to 1.63, management taking advantage of favorable financing in the TBA dollar roll market. 2.7M shares repurchased (less than 1% of the float) at average of $29/share. Shares off a hair AH. (PR) [View news story]
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
More on CYS Investments (CYS) Q4 earnings: Net asset value of $13.31/share falls from $14.46 in Q3, thanks to $0.52 special dividend and sliding RMBS prices. Company had a GAAP loss of $0.24/share thanks to the drop in RMBS prices. Net interest spread declines to 1.08% from 1.41%. 15-year fixed agency MBS continues to make up more than 50% of holdings. (PR) [View news story]
American Capital Agency Offers A 16% Yield And A 3% Discount To Book Value [View article]
American Capital Agency Offers A 16% Yield And A 3% Discount To Book Value [View article]
The 1.36 number and charts in the article came from a pdf from AGNCs website. I am not sure why there is now a difference.
American Capital Agency Offers A 16% Yield And A 3% Discount To Book Value [View article]