Seeking Alpha

Joe Eifrid

 
View as an RSS Feed
View Joe Eifrid's Comments BY TICKER:
Latest  |  Highest rated
  • Tesla Motors: Dilution Is Inevitable [View article]
    TSLA - Institutional ownership of TSLA stock has declined from $84% in Jan to 66% today - Merrill notes

    TSLA - '..now appears that retail investors are playing an increasing role in driving the stock price higher,' Merrill adds.

    '..and could be at risk when a correction, which we believe is long overdue, ultimately occurs. - Merrill.
    Sep 23 09:26 AM | 1 Like Like |Link to Comment
  • Target Joins Netflix's List Of Competitors With Video Streaming Plans [View article]
    AMZN has 41,000 titles. How many does NFLX have?

    TIA
    Sep 5 03:17 PM | Likes Like |Link to Comment
  • American Capital Agency's Mid-Q3 2013 Composition And Valuation Analysis - Part 2 (Derivative Portfolio) [View article]
    FWIW;
    SEC filings;
    http://1.usa.gov/18w037H
    Sep 1 07:31 PM | 1 Like Like |Link to Comment
  • American Capital Agency Corp.'s Mid-Q3 2013 Composition And Valuation Analysis - Part 1 [View article]
    One difference between new homes sales and existing is that new home sales is forward looking. New homes sales count homes that came under contract. It is possible that the home hasn't even been built yet. This number is reported by the government.It is also more of a survey. http://1.usa.gov/18bP57a

    Existing home sales are for homes that have closed. That report comes from the National Association of Realtors. It is more of a lagging report as homes may not closed for 60 to 90 days after coming under contract.
    Aug 24 08:17 PM | 1 Like Like |Link to Comment
  • Assessing American Capital Agency's Dividend Sustainability: 2Q13 Update [View article]
    I don't think that effects the mREITs. It will be the mortgage insurers (RDN, MTG, GNW, AIG, and others) that take the risk. Of course they will cover that risk in theory through guarantee/insurance fees. Those fees should be passed on to the homebuyers themselves through higher mortgage rates with the fees built in. In essence the mortgage insurers will be replacing Fannie and Freddie to some extent, with the government picking up where the insurers leave off.

    Fannie and Freddie gone could actually be good for mREITs.

    Gary Kain with AGNC touched on a world without Fannie and FReddie at the Barclays conference in May. I posted this before recently to another article asking about Fannie and Freddie. Thought it worthwhile in response to share again;

    "And so what we’re trying to show here is sort of a more normalized environment where let’s say interest rates, mortgage rates are 5% they could obviously be higher than that, they are actually now more like 3.5% and right now if you looked at margins over the past three years, they probably average closer to 2%, but let’s think about a world in the future where margins come in further and maybe they are a 100 basis points versus the 200 we have seen and even with maintaining leverage at ball park eight times as you can see you can get a gross ROE of 13% with that scenario and that’s still a reasonable kind of return picture in an environment where interest rates are a couple of 100 basis points higher and where the yield curve is flatter. Now the question is what was the 100 basis point margin attainable in that type of environment? yes that’s really sounds conservative relative to where you have been, but is that still a stretch and we don’t feel that way and in the past, in other flatter yield curve environments, it may have been more of a challenge to hit those kind of numbers and the reason it would have been a challenge was because of Freddie and Fannie and Freddie and Fannie’s portfolios could lever 40 to 50 to one.

    And so even a 50 basis point spread with 40 times leverage produced a 20% ROE. So with that in periods where interest rates were higher and the yield curve was flatter and there wasn’t a lot of mortgage production because there wasn’t a lot of refinancing activity, someone who could lever 10 to 1 couldn’t compete with a GSE that could lever 40 or 50 to one had favorable funding they could also fund 10 or 20 basis point lower and could lock in funding over a longer period of time.

    But now that GSEs are out of the picture not running for profit, portfolios are shrinking their, for-profit portfolios in an environment in the future, there is no one with the ability to lever considerably more than eight to 10 times and that’s of enough size to kind of to impact the market and so almost by definition, market pricing has to be consistent with where the next best fit is and so we feel we’re certainly in that category and so I think this is an important take away for people which is we don’t believe that the REIT is the agency mortgage REIT or the hybrid mortgage REIT business models are dependent on zero interest rates and a steep yield curve in the future and I think this will be one of the biggest surprises for people overtime and looking at the industry.so with that what are going to be the drivers of long term success and first of all like any investment business and that’s the business we’re in it comes down to asset selection."
    Aug 23 07:48 PM | 3 Likes Like |Link to Comment
  • Western Asset Mortgage: Is It Time To Panic? [View article]
    What would you say is an acceptable current ratio for a mREIT?
    Aug 19 09:35 PM | Likes Like |Link to Comment
  • Western Asset Mortgage: Is It Time To Panic? [View article]
    Gary Kain with AGNC touched on a world without Fannie and FReddie at the Barclays conference in May;

    "And so what we’re trying to show here is sort of a more normalized environment where let’s say interest rates, mortgage rates are 5% they could obviously be higher than that, they are actually now more like 3.5% and right now if you looked at margins over the past three years, they probably average closer to 2%, but let’s think about a world in the future where margins come in further and maybe they are a 100 basis points versus the 200 we have seen and even with maintaining leverage at ball park eight times as you can see you can get a gross ROE of 13% with that scenario and that’s still a reasonable kind of return picture in an environment where interest rates are a couple of 100 basis points higher and where the yield curve is flatter. Now the question is what was the 100 basis point margin attainable in that type of environment? yes that’s really sounds conservative relative to where you have been, but is that still a stretch and we don’t feel that way and in the past, in other flatter yield curve environments, it may have been more of a challenge to hit those kind of numbers and the reason it would have been a challenge was because of Freddie and Fannie and Freddie and Fannie’s portfolios could lever 40 to 50 to one.

    And so even a 50 basis point spread with 40 times leverage produced a 20% ROE. So with that in periods where interest rates were higher and the yield curve was flatter and there wasn’t a lot of mortgage production because there wasn’t a lot of refinancing activity, someone who could lever 10 to 1 couldn’t compete with a GSE that could lever 40 or 50 to one had favorable funding they could also fund 10 or 20 basis point lower and could lock in funding over a longer period of time.

    But now that GSEs are out of the picture not running for profit, portfolios are shrinking their, for-profit portfolios in an environment in the future, there is no one with the ability to lever considerably more than eight to 10 times and that’s of enough size to kind of to impact the market and so almost by definition, market pricing has to be consistent with where the next best fit is and so we feel we’re certainly in that category and so I think this is an important take away for people which is we don’t believe that the REIT is the agency mortgage REIT or the hybrid mortgage REIT business models are dependent on zero interest rates and a steep yield curve in the future and I think this will be one of the biggest surprises for people overtime and looking at the industry.so with that what are going to be the drivers of long term success and first of all like any investment business and that’s the business we’re in it comes down to asset selection."
    Aug 19 09:30 PM | 1 Like Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    The market is dumping the whole industry and just about anything connected to interest rates. Over-reaction??
    Aug 19 01:54 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    More on BK potential...
    Here is a comparison chart for preferreds CYSpB, BBTpD, and JPMpA. All ipo'd this spring. I don't think anyone is suggesting BK for BBT or JPM. I think the chart shows that interest rate fears are effecting the whole fixed income arena. Here is the chart (had a hard time finding a chart link that did comparison for preferreds longer term. I did my own);
    http://bit.ly/14TSug2
    Aug 18 12:31 PM | Likes Like |Link to Comment
  • Buy Annaly Over American Capital Agency? [View article]
    Not speaking for the author, but sometimes it takes a day or two to get published from the time the article is submitted.
    Aug 17 04:07 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    Just a heads up... MITT-A and MITT-B go ex-div on the 28th. First ones of the dividend cycle.
    Aug 16 08:19 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    Bankruptcy? Probably file Monday...lol! No, seriously...CYS-B is yielding right at 9%. I don't normally think BK risk until yields reach 20% or more. That indicateds real fear. CYS-B and most the other mREIT preferreds are yielding about 8.5% to 9%, so CYS-B is not out of line. What we have is those wanting to sell finding few buyers and the industry faces much uncertainty. However, I think the preferreds are falling more in sympathy to the common. High yield is yielding 6.5%. Dang, even MFA's exchange traded SENIOR debt is yielding a bit more than 8%. Also, CYS-B volume today was just 75% of the last 30 day average. Me? I think the market has it wrong on the preferreds. I know, the market is never wrong, but it does get irrational at times. If you are thinking bankruptcy, then you have to think the whole industry is going bankrupt if you are using price action as an indicator. Even the mortgage CEF are showing charts that rhyme.

    Keep in mind that CYS-B is a fairly newly issued preferred. Being new it's holders will typically have weaker hands. I bought some CYS-B today. I got to think 9% yields are close to a bottom.
    Aug 16 07:56 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    "I contribute to Quantumonline because they have helped me immensely"

    Me tooo! I love that site and make sure I send a contribution yearly if not more.
    Aug 14 09:48 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    RNP about 50% into equity REITs. 47% in preferreds. Looks more like a equity investment and not debt (mortgage). That's fine, although as interest rates go up, they will not be as popular IMO. Suddenly SPG's 2.9% yield doesn't look so yummy. The last two dividends, 42% of the 30 cents quarterly was return of capital. I don't like to see that and probably why they are selling at a hefty discount to NAV.
    Aug 14 09:46 PM | Likes Like |Link to Comment
  • PennyMac prices secondary offering; shares off 4.1% [View news story]
    Thanks! I don't know why I didn't read the press release.
    Aug 14 09:26 PM | Likes Like |Link to Comment
COMMENTS STATS
336 Comments
358 Likes