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Ray Merola  

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  • Is Now The Time To Buy Financials? [View article]
    Nicholas

    Very good article. I appreciate the detail and analysis.

    What is the reasoning for concern about Bank of America Level 3 / 2 assets in ~3% and 87% ratios, but not for Wells Fargo with Level 3 / 2 assets at ~2% and 94%?

    I own Wells and agree fully it's best-in-class. Management is superior, and the business model is very strong.

    Also agree that Bank of America has challenges, in particular within the senior leadership ranks and business alignment.

    However, I find it difficult to argue asset quality / risk is a differential metric given the specifics cited in your article.

    If one wants to diss BAC, it seems they need to find another way to do it?
    May 13, 2015. 02:11 PM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Yes, wiseone

    I suspect Annaly management will be loathe to cut the payout. However, the balancing act is preserving total book value (that dictates how much they are paid).

    Annaly can underearn a few quarters and keep the payout. The issue will become acute if it goes on for awhile, and spreads don't open up. Watch the NIM: this is a clue as to how much juice they have to work with.
    May 13, 2015. 01:25 PM | 1 Like Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Probably not much???

    Shareholders have a chance to vote at the AGM. If enough shareholders vote for something, it gets attention.

    Bank of America caught a lot of heat for consolidating the CEO and Chairman role. Due to shareholder pressure, the issue will be voted upon in 2016.

    The lead director that engineered that combination only received 66% of the votes cast for re-election to the board. The previous time he received 98% of the votes cast.

    These kinds of things send a message.
    May 13, 2015. 01:22 PM | 1 Like Like |Link to Comment
  • This Is What You Need To Know About Annaly Capital [View article]
    True, rainmn.

    That's part of the story. The other part is Annaly management is remunerated entirely by preservation / growth of total shareholder equity.
    Jacking up dividends (and presumably the associated net interest income to cover it) typically requires a hit to book.

    As rates rise, it will be a difficult balancing act to improve both net and book.
    May 12, 2015. 08:12 PM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    lookuphere

    Thank for commenting.

    I am disappointed with Annaly's I.R., if there is any at all. A number of S.A. commentators have noticed a similar silence after contacting Annaly Capital. My first-hand experience is large listed corporations return communications from shareholders. In a number of cases, I've found senior staff will join I.R. reps, as appropriate. Many of these companies with whom I've dealt dwarf Annaly by any metric.

    While not necessarily a fatal flaw, it's just another piece of the puzzle that paints a picture of how NLY management acts / reacts real-time.
    May 12, 2015. 08:02 PM | Likes Like |Link to Comment
  • Buck The Traders: United Rentals On Sale Now [View article]
    Thanks MMMo

    I am an investor, not a swing trader, so our objectives may not be the same. I like United Rentals underlying business model, management, and forward prospects. If the company executes, it can do much better than playing a cycle/channel trade.

    The stock rose from $40 to $80 in 2012-13. In 2014 it ran up to $118, then backtracked to the low $80s on energy-related fears. It's back over $100 now.
    May 12, 2015. 04:56 PM | Likes Like |Link to Comment
  • Buck The Traders: United Rentals On Sale Now [View article]
    Aryeh C

    As noted in the article, the long-term trimmed average operating P/E multiple is 14x. I'm happy using that as a benchmark. I believe it's possible URI shares could experience P/E multiple expansion in an up market.
    May 12, 2015. 04:51 PM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    **NOTE TO READERS** It's been more than 24 hours since my I.R. inquiries. No written response to the email other than the canned message noted a few comment up. No telephone response whatsoever.

    Annaly isn't in its pre-earnings "quiet period," nor in the midst of an Investors Day or other large event.

    My first-hand experience is most good listed companies respond to investor inquiries within a day or so. I will give Annaly a little more time; however, previous experience has registered no response.
    May 12, 2015. 04:24 PM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    AB

    mREITs have fallen on tough times. The interest rate spread has been compressed for what seems like forever, and some yield-chasers got into NLY perhaps without fully understanding the risks and how the business makes money. This appears to have caused further share distribution and washout.

    The concept is ok, and I don't believe this business is down for the count.

    My concern is the new management team, specifically Wellington Denahan. She is no Mike Farrell. All I ask is to be told the whole scoop and general accessibility.
    May 12, 2015. 04:20 PM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Thanks for your comments, smurf

    Everyone needs a scapegoat, right?

    I suspect there's pressure on the corner office, but the top execs remain fairly well-insulated. Denahan noted on the CC that most of the institutional investors remain onboard. My opinion is the board is very well-controlled.

    While the reasons are not clear, there has been a fairly high number of high-ranking staff departures. This could be a result of "philosophical" differences.

    Until the big guys turn up the heat, I suspect Annaly management will continue to rock along and collect the fees.

    In the meantime, investor should note that institutional investors only control about half of the outstanding stock. Smaller investors can make a difference and should express their views via the annual meeting vote.

    The 2015 AGM is May 21.
    May 12, 2015. 01:00 PM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Vance

    I appreciate you reading and commenting. Thank you.

    My disappointment with management has not lead me to sell my shares yet. The stock remains undervalued, and I continue to DRIP.

    However, Annaly management doesn't encourage me. I believe their objective to maximize total shareholder equity may not be aligned with some investors' objective to maximize shareholder equity per share; or maximize net investment income and core earnings.

    On the first count, the management agreement makes it very clear the goal is to grow equity. Buybacks are out. Other performance metrics don't count.

    On the second count, execs may have a peripheral interest to avoid a dividend cut. While this will not hurt remuneration, it would likely lower the share price and their own stock/options.

    One might conclude Mr. Market is already anticipating a dividend cut. The P/B differential is very large.
    May 12, 2015. 11:35 AM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Yes, I see. Apologies. Your original comment had me thinking the article was negative. ("laid out a lot like...")

    Having now read your article, Capstead appears to be run a bit differently, though NLY and CMO are both mREITs.
    May 12, 2015. 10:55 AM | 1 Like Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    MobilePreacher

    Indeed, management / shareholder potential conflict of interest isn't limited to Annaly. It's symptomatic of a number of REITs.

    As the largest and oldest mREIT, I would like to see Annaly's management address the issue head-on.
    May 12, 2015. 10:14 AM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Evidently not throwing in the towel; a good thing!

    However, the purchase (and those of other directors/officers) doesn't justify the weak earnings CC remarks.

    The stock is undervalued, and she added to her position.
    May 12, 2015. 10:11 AM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Thanks for sharing, User12690101

    A few corporate execs/directors have purchased NLY common shares on the way down. It's a positive that CEO Denahan has completed a significant buy transaction recently.
    May 12, 2015. 09:33 AM | Likes Like |Link to Comment
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