Seeking Alpha

Albert Alfonso  

View Albert Alfonso's Comments BY TICKER:
  • A Rough Month For American Capital Agency [View article]
    DHL,

    "Great, but that still does not explain the persistent discount to BV most of the major mREITs are seeing since 2013."

    If I could read the markets like that, I would not be writing here. Thing is that the markets are sometime irrational. See Apple in 2013, Tesla in early 2015.

    "(W)hy aren't share being priced accordingly?"

    I think the market is expecting an "imminent" rate hike has been doing so for a long time. You can blame the Fed and its unclear guidance for this uncertainty. Also, turn on CNBC and try not to get nervous. They (and other media outlets) are using fear mongering tactics.

    "In either case, using BV as a performance metric is suspect at a minimum."

    Just to be fair, look at the price action for the mREITs prior to 2013. They are now trading at even larger discounts than in 2008/2009! Looking at NLY's (the oldest mREIT) historical data, it appears the current situation is the exception, not the rule. They have made money during many different interest rate environments.
    Jun 17, 2015. 07:51 AM | 3 Likes Like |Link to Comment
  • A Rough Month For American Capital Agency [View article]
    DHL,

    "And no one looked at BV of the big banks at the peak of the financial crisis...it was the stock prices that put them into difficulty. Even good assets can be sold for .10 on the dollar in dire conditions."

    Problem with that comparison is that mREIT holdings are agency MBS. In other words, high quality and government backed. These are highly liquid assets and are bought/sold by the billions daily. Outside of treasuries, these are some of the safest assets out there, with demand far exceeding supply.

    The companies which went belly up during the financial crisis often held black box type assets -- hard to value, hard to sell. Let us not even compare leverage back then to now. Lehman was 30x in 2008. Compare that to 6 or 7x for AGNC.
    Jun 16, 2015. 03:11 AM | 1 Like Like |Link to Comment
  • A Rough Month For American Capital Agency [View article]
    Alphatag,

    I agree that the market is looking for 3-4% rates. The street seems to want to front run the Fed and not get caught by surprise. Yet, back in 2013, when everyone thought rates were bound to head higher, nothing happened. Same thing occurred in 2014.

    Also, earlier this year, everyone was calling for a June rate hike. Once the Q1 GDP shocker came in, that talk died down. Even then, some have claimed the GDP number should be discounted due to "seasonality"... Sometimes it seems you can never win ..
    Jun 12, 2015. 09:24 AM | Likes Like |Link to Comment
  • A Rough Month For American Capital Agency [View article]
    DHL,

    Regarding book value,

    You argue that it is a meaningless metric, then how are we supposed to measure performance? BV is not a made up number -- there are real assets behind it.

    I would argue that share price is the true meaningless number. Supply/Demand dictates the share price. Even Warren Buffett judges his performance by the performance of his book, not the share price.
    Jun 12, 2015. 07:57 AM | 1 Like Like |Link to Comment
  • A Rough Month For American Capital Agency [View article]
    Alphatag,

    How can rates in the US be 4% in 2016 if Europe is below 1%? There is NO inflation -- look at the price of oil and other commodities like iron, steel, coal, wheat, corn etc. If the Fed raises rates now, watch the US enter into a recession ASAP. Q1 2015 GDP was already near zero...
    Jun 12, 2015. 07:50 AM | 2 Likes Like |Link to Comment
  • A Rough Month For American Capital Agency [View article]
    NoMoreObaMao,

    No way that is true. ARR has not seen a positive ROE since 2013. AGNC made 20% plus is 2014 and has earned ~3% this year.
    Jun 12, 2015. 07:46 AM | 2 Likes Like |Link to Comment
  • American Capital Agency: Riding The Volatility [View article]
    richbar,

    I like AGNC, but it is not a bond alternative. Rather, it is a risky, high yield, leveraged play on the MBS spreads. I keep names like these at ~2.5% of my capital, no need to be a hero.
    May 13, 2015. 10:33 AM | 4 Likes Like |Link to Comment
  • American Capital Agency: The Sky Is Not Falling [View article]
    Bruce,

    I got a lot of heat back in 2013 when I told everyone to avoid ARR. Never understood why they get the benefit of the doubt. They do not even have a full-time CFO/IR guy. I've sent emails to them and not once have they replied. Tells you what they think of us small-time investors...
    May 6, 2015. 11:49 AM | 3 Likes Like |Link to Comment
  • American Capital Agency: The Sky Is Not Falling [View article]
    tony8900,

    You would think the "debt-like" preferred stocks would get crushed if the common were having major problems. I think this tells us that the market is overreacting.
    May 6, 2015. 10:33 AM | 2 Likes Like |Link to Comment
  • American Capital Agency Illustrates The Busted Agency MREIT Business Model [View article]
    Tim,

    AGNC posted a positive 7% return during a hectic Q1 2015 and that is a busted business model? More like the market is pricing in more risk and demanding a larger discount.

    Otherwise, a good fact-based article, just hated the title :)
    Apr 28, 2015. 11:59 PM | 3 Likes Like |Link to Comment
  • A Shocking Dividend Cut At American Capital Agency [View article]
    Bruce,

    I added on this dip at $21.75. First new capital in AGNC since the Q1 2014 when we were below $20. Cost basis is now firmly below the book value.

    The company still posted a positive total return this quarter. While I get why the market sold the stock off, we are due for a bounce.
    Apr 28, 2015. 11:46 PM | Likes Like |Link to Comment
  • A Shocking Dividend Cut At American Capital Agency [View article]
    Chancer,

    That was a good move in hindsight.

    I own AGNC/MTGE/CYS, though their % of my invested capital has fallen since I have not added new capital since Q1 2014. I look at them as a hedge for my equity long position.
    Apr 28, 2015. 12:41 PM | Likes Like |Link to Comment
  • A Shocking Dividend Cut At American Capital Agency [View article]
    Ralph,

    I am shocked since they more than covered the dividend with spread + dollar roll income. I just did not see this coming.
    Apr 28, 2015. 12:39 PM | 2 Likes Like |Link to Comment
  • A Shocking Dividend Cut At American Capital Agency [View article]
    rosenose,

    Yup, you are correct. If you listened to what Mr. Kain said on the MTGE call, you'll have notice how conservative he has become. MTGE lowered its dividend for the same reasons, though that cut was sharper than in needed to be, IMO.
    Apr 28, 2015. 12:38 PM | 1 Like Like |Link to Comment
  • A Shocking Dividend Cut At American Capital Agency [View article]
    drking,

    I am in the same boat. Red on AGNC in capital losses, though green when dividends are included. I might add on this dip to lower my cost basis even further.
    Apr 28, 2015. 12:36 PM | 1 Like Like |Link to Comment
More on AGNC by Albert Alfonso
COMMENTS STATS
2,618 Comments
4,056 Likes