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Patrick Harden  

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  • Prospect Capital: Reconciling Different Points Of View [View article]
    It still isn't very clear what Prospect is going to do with the capital raised via the rights offering. The company is divesting itself of three pretty successful lines of business with no clearly articulated plan for what is going to replace that business.
    Jul 21, 2015. 04:36 PM | 1 Like Like |Link to Comment
  • Deconsolidate This: Buy Bimini Capital Management, Sell Orchid Island Capital [View article]
    I think you deserve a victory lap. Great analysis and actionable trade that delivered results very quickly. Kudos all around!
    Jul 10, 2015. 10:43 AM | Likes Like |Link to Comment
  • Orchid Island Capital declares $0.14 dividend [View news story]
    Oh lord, here come the pitchforks.
    Jul 10, 2015. 09:59 AM | 5 Likes Like |Link to Comment
  • Do Not Buy Annaly Capital, Yet [View article]
    I'm very surprised that Annaly has not made an offer for Chimera or at the very least increased its stake. I thought they were just waiting for Chimera to file its delinquent financials and get stabilized, but an NLY offer hasn't materialized. Given Annaly's rather vehement distaste for stock buybacks, why not employ AGNC's rather elegant solution of buying ANOTHER mREIT that is trading at a large discount to book - thereby taking advantage of a very accretive investment opportunity without decreasing assets under management.
    Jul 1, 2015. 04:08 PM | 3 Likes Like |Link to Comment
  • Capitol Federal Financial declares $0.25 dividend [View news story]
    This is a special dividend, not a bump in the normal quarterly dividend.
    Jun 1, 2015. 11:21 AM | Likes Like |Link to Comment
  • Fifth Street Finance's (FSC) CEO Todd Owens on Q2 2015 Results - Earnings Call Transcript [View article]
    LOL. I wish I'd had some popcorn for this one. Not quite as juicy as the PSEC call last quarter, but highly enjoyable nonetheless.
    May 11, 2015. 02:55 PM | 4 Likes Like |Link to Comment
  • Prospect Capital's Rights Offering: A Pure-Play Value Added Subsidiary [View article]
    I would like to know what kind of investments PSEC is planning on making with the rights offering proceeds that have a higher return than the equity tranches of CLOs.
    May 6, 2015. 01:02 PM | 2 Likes Like |Link to Comment
  • Rough quarter for Javelin Mortgage [View news story]
    The best part was that they tried to smooth over the gap between ordinary taxable income and the dividend payout by highlighting "Core Income and estimated taxable Real Estate Investment Trust ("REIT") income of approximately $1.9 million, or $0.16 per Common share, and tax capital gains realized of approximately $4.3 million." As if they didn't have a giant net capital loss for tax purposes to absorb those gains.
    May 4, 2015. 04:52 PM | 1 Like Like |Link to Comment
  • 3 Ways For Prospect Capital To Create Value For Shareholders, Instantly [View article]
    I don't normally read much of the Fool any more, but that article summed up the situation nicely, particularly Wathen's conclusion - "I see this rights offering as a way for Prospect Capital to dump its CLOs at an above-market price to its existing shareholders, create desperately needed liquidity at Prospect Capital Corporation, and generate more fee-earning assets for its external manager, which is seemingly the only beneficiary of a rights offering vs. a true spinoff."
    Apr 16, 2015. 05:06 PM | 4 Likes Like |Link to Comment
  • 3 Ways For Prospect Capital To Create Value For Shareholders, Instantly [View article]
    Honestly, I think the best thing PSEC could do to create value is sell the company to someone with credible management. Or liquidate. That last earnings call was pretty much the last straw for me with them.

    I still own a small position just because I haven't needed the tax losses yet this year and at this point, I'm just hate-owning the stock.
    Apr 15, 2015. 12:15 PM | 9 Likes Like |Link to Comment
  • More on the Annaly downgrade: A lose-lose situation [View news story]
    Annaly is running with pretty low leverage at the moment - somewhere on the order of 5.5x. Taking leverage up into the 6s could mitigate some of the spread narrowing. Not much can be done about prepayments, but haven't most people who could refinance already done so?

    Would really like to see Annaly buyout Chimera and fold in some non-agency RMBS to the portfolio for additional yield and diversification.
    Apr 8, 2015. 03:25 PM | 7 Likes Like |Link to Comment
  • American Capital Mortgage hit with downgrade after dividend cut [View news story]
    The dividend cut should have been anticipated by everyone after these comments from Gary Kain on the fourth quarter earnings call: "We maintained our $0.65 dividend in Q4 against the backdrop of $0.51 of taxable income in the quarter.
    As such, the remaining $0.14 per share of our dividend essentially came from undistributed taxable income, which was in essence income earned in prior periods. Given today’s market conditions and our current portfolio positioning, we don’t expect to see a near term increase in taxable or GAAP earnings. These are important factors both management and the board will consider with respect to future dividends."
    Mar 20, 2015. 10:09 AM | 2 Likes Like |Link to Comment
  • Prospect Capital's (PSEC) CEO John Barry on Q2 2015 Results - Earnings Call Transcript [View article]
    Wow. Reading this was uncomfortable enough. I can only imagine how it sounded on the call. Jon Bock makes a good point though. I hope PSEC can deliver on this magical spinoff plan of theirs.
    Feb 5, 2015. 08:42 PM | 6 Likes Like |Link to Comment
  • Wells Fargo pulls the plug on mortgage REITs [View news story]
    I think Wells is essentially correct in that the flattening of the yield curve is a major headwind for the mortgage REITs. However, I would think that the mREITs would respond to the falling long end of the curve by selling appreciated long-dated fixed agency MBS and using the proceeds to repurchase stock. That would be my tactic.
    Jan 12, 2015. 10:15 AM | 4 Likes Like |Link to Comment
  • The Fed Has Ended QE, Should We Dump Annaly? [View article]
    The Fed will continue to have an effect on the agency MBS market for some time still:

    "The FOMC also directed the Desk to maintain the existing policy of reinvesting principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction...Reinvestments in agency MBS will continue to be concentrated in newly-issued agency MBS in the To-Be-Announced (TBA) market."

    Where I think Annaly differs from its peers is that Annaly is not availing itself of the financing advantage available on TBA pools. That financing advantage will continue as long as the Fed reinvests runoff into TBA pools. Annaly prefers to buy specific pools that provide prepayment protection. I disagree with this approach, as I believe we will experience a gradual increase in long-term rates that will naturally dampen prepayment speeds in 2015, making TBA pools more attractive to specific pools.

    If I were selecting an agency mortgage REIT for my portfolio, given my views, I'd pick AGNC over NLY.
    Oct 30, 2014. 01:28 PM | 1 Like Like |Link to Comment