Tucker Leppa

Long only, reits, macro
Tucker Leppa
Long only, REITs, macro
Contributor since: 2013
I will start by saying that AGNC hasn't increased their dividend 1 time since the 2Q of 2009.
The earnings number I find most relevant when evaluating their dividend is the "net spread and dollar roll income per common share". This quarter it was $.87.
The problem I have with AGNC is the volatility of their earnings. If you average out the last 4 quarters you get $.63, only 2 cents below the dividend. So by my estimates, if there is a decrease in dividend, it won't be very large.
I think there is an opportunity to make money trading in AGNC, but I don't have any money invested there.
"This quarter ends in one week, and we will know more details around the first or second week of August, when the company reports."
I could be wrong, but I'm pretty sure their 2nd quarter ended June 30th.
I wouldn't be surprised by an earnings miss to the low side, along with an unimpressive economic return for the second quarter. I hope I'm wrong.
Since when is 1 quarter, out of the 4 quarters it has existed, with positive economic returns "killing it"? If ORC traded rationally, in-line with the industry it would be trading under $12.50.
Yea (NYSE:CMO) has done terribly with their defensive portfolio, oh wait.
Therefore DX > mREIT industry
That logic doesn't really stack up for me as I haven't been a big supporter of investing in NLY for a long time, and I continue to believe that (NYSE:CYS) is the best mREIT.
Where do they get missed by $.06, I thought forecasts showed $.325 core earnings + drop? Looks like another great quarter by (NYSE:CYS). I think they have out performed the rest of the agency mREITs again this quarter.
They are very similar returns, but we will see what happens when the second quarter results come out.
Not if Zimmer repeats the history he had with Bimini. In the long run you weren't ok, unless losing 90% of your capital was ok.
I'm guessing because most of them are buy Drip and forget investors. Trading is a whole different story.
No way man, as soon as Zimmer left they turned the ship at Bimini! Just look they have a wholly-owned subsidiary who is an adviser for (ORC). I think these guys are all winners! (Note the Sarcasm).
"ARMOUR Residential REIT (ARR) is an internally-managed mortgage REIT company"
Stopped reading there.
You do realize that all your comments are pretty much worthless as all the data I used was as of the time of posting (May 7th), which is over a month ago. However, I will respond to all your points here for simplicity.
First at the time of that post the P/B was $4.67 as you even said, meanwhile both yahoo finance and the ARR website under Key Ratios read a P/B of $5.32. Obviously I cannot prove it now as I didn't take a screen shot of the website and it has sense been changed. So to argue over it is pointless.
Second, just using a quick glance I'm guessing you pulled the insider ownership numbers right off yahoo finance? If so it isn't even worth arguing with someone who bases their investments off those statistics as often they are wrong/out of date. I don't get the relevance of more outstanding shares to your argument...
Last your p/b ratio is using current valuations, my post was over a month ago, how can you seriously say I made an error when it will obviously change considering the price fluctuations and also book value changes from this latest earnings report when my post was before them. At the time my ratios were correct, but of course they aren't now I don't get your point.
The reason NLY would never be a target of shorts is the large institutional holdings, they would never be able to drop the stock price.
Either you can't read or you are just being a troll.
That is why it can be so dangerous to be in the non agency space. Most of the pure agency mREITs like MFA and NLY emerged from the financial crisis just fine.
I wouldn't call insider buying a very big positive when insider ownership is under 1%. The insider buying is next to nothing, in fact there was almost more shares awarded under the stock incentive plan than bought in 2014.
Also on the "paid" from outside sources to pump or slam a stock is quite silly. I think most people would agree with me in the fact that most articles from most sources have very little impact if any on how a stock trades. Believe what you want, I could care less.
You'd have to be a brave man to short a mortgage REIT with a 17% dividend yield.
Yea I would agree that the compensation is out of control for most mortgage REITs. I would agree that the forward guidance isn't that great, but I would say the forward guidance on ORC is quite mixed.
I don't like to use GAAP earnings, and the company doesn't provide a core earnings. You need to clarify your use of P/E because P/E ttm is actually 33x using GAAP. The use of GAAP earnings also makes it difficult to tell if their dividends are being covered by the earnings. I would agree in hindsight I should have added more positives, but I wouldn't use the ones you did.
Never use Yahoo if you're looking for a company's financial information, use the 10-Q, 10-K or their press release. Also you don't want to use the GAAP net income, use the Core Earnings, as it is more representative of the dividends. You could also include drop income, but from what I've seen only CYS and AGNC have drop income. So I'd look at the $.35 a share number as earnings go. Hope this helps.
Mike hit the nail on the head. The returns wouldn't be worth the risk.
Thanks for the kind words Mike, hope you found the information useful.
I was simply listing the management fee so people knew.
The $107 million wasn't relevant in the sense of the management fees, but in the reimbursement to Bimini for the expenses listed.
Seeming how the management is the same, the company type is the same, nearly everything is the same as Bimini, so why would Bimini's history not be relevant?
I've had enough gibber jabber, I will not stoop to your pettiness and so this is the last time I will be responding to your comments.
Where are you seeing the $2 per share of losses on (CYS) I'd appreciate a link. No I'm not short ORC, I would list it in the disclosure area. I wouldn't recommend anyone short Orchid for that matter. I'm not asking you to sell, I just wanted to provide you with more information to make your own opinion.
The company didn't do the stock offering when the price was above book value. The companies price is now above book value as a result of the offerings (causing a decrease in the book value).
I don't see which part of my article was hateful in any way, but if you could tell me which part that would be helpful in the future. If you looked at my past articles you would see I have posted multiple articles on CYS (disclosing my position in those articles as well). My CYS position has performed great for me.
What I find funny most of all is that you say I post a hate article, which I would disagree with. Then you accuse me of being short and saying CYS is losing $2 per share and that CYS loses money like crazy. All being factually incorrect and ironically hateful.
Thanks for the fun.
I did mention this, it is under the Who Orchid Island Capital Is heading, and it is in the chart. It is nearly $15 million dollars.
I would hardly say they are dependent on performance and dividends. As long as they keep growing stockholders' equity the company will benefit, but of course they want the company to perform well.
Thanks for taking the time to comment!
I'm not trying to scare anyone, just providing information to people who want it.
I offered no quantitative estimate because I do not know, and I wouldn't like to venture a guess. I did point out that shareholder equity is $107.4 million. There is a big picture with a red square around it.
If I was to analyze how BV has changed over the current quarter I would be more likely to use the 30 year as 83% of their portfolio is Fixed rate RMBS with a weighted average maturity of 311 months. What you also neglect is the effect the dividend has on the book value.
I would love to hear your analysis on ORC's novel hedging approach. If the company has such a wonderful strategy why was there a need to split off the company from Bimini, who is a company that is also a mortgage REIT and invests in the same securities?
What I find a scare is that you dismiss the litigation issues by calling it a common occurrence. I would agree that there were no convictions of wrong doing, and I never said otherwise. I was simply laying out the information and letting the readers draw their own conclusions.
I have nothing against the companies or the management team, I just wanted to shed some light on things I thought were important as well as interesting. Most of my sources are SEC filings and lawsuit documents, so for you to call this yellow journalism is absurd.
Holy cow, you know what I just realized? That is the same Mr. Zimmer that manages (ARR). Mind blown.
Hope it was helpful to you and others, thanks for reading!
After what I've read I personally wouldn't invest money in this company, regardless of price. I wouldn't consider this a slam article, I'd consider it a summary of events.
How could you possibly call it "much safer" when you have no idea what assets they have invested in? I believe in the financial crisis most of the non-agency space was taken out.
10 year treasury yield just dipped to the lowest its been in 7 months... I do see a decline in earnings, especially if they were hedged improperly whether it will be 25% will depend if they do another public offering of common stock that is dilutive as opposed to one that is accretive.