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The mortgage REIT sector (MORT -1%) continues under pressure, today led by Western Asset...

The mortgage REIT sector (MORT -1%) continues under pressure, today led by Western Asset Mortgage (WMC -7.6%) as its book value blew up in Q1 thanks to portfolio losses. American Capital Agency (AGNC -1.5%) - which started the downturn when it reported losses 2 weeks ago - nears a 52-week low, Armour Residential (ARR -3.1%) hits one. One trader suggests Capstead Mortgage (CMO -1.4%) with a portfolio of mostly reset ARMs the least affected by rising rates. CYS Investments (CYS -0.7%) - trading at a 10% discount to book and also owning ARMs - is attractive as well.
Comments (18)
  • Whats^
    , contributor
    Comments (2) | Send Message
     
    Is AGNC a buy now?
    15 May 2013, 10:34 AM Reply Like
  • dieuwer
    , contributor
    Comments (2409) | Send Message
     
    It's a sell as book value will crater due to lower long-term treasury bond prices. The spread may improve a bit however, until the FED start raising interest rates (later this year, or early next year).
    15 May 2013, 10:43 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2610) | Send Message
     
    Lower long term bond prices would increase BV, and hurt the spread, not crater BV and increase spread
    15 May 2013, 11:45 AM Reply Like
  • Zenith Strategies
    , contributor
    Comments (459) | Send Message
     
    I believe the Fed will raise rates in late 2014 at the absolute earliest.
    15 May 2013, 12:19 PM Reply Like
  • metatronic
    , contributor
    Comments (9) | Send Message
     
    If by next year you mean 2016 then you're right but as far as I know, it's still 2013.
    15 May 2013, 01:53 PM Reply Like
  • mostserene1
    , contributor
    Comments (3345) | Send Message
     
    Yes, its a buy. IMO. Because 2013 dividends are paid from 2012 earnings, at least the next two quarters are safe for the healthy dividend, so you are buying the dividend cheap. Every year or two mREITS plummet on some news or the other, then go back up. They survive.

     

    Long AGNC and NLY.
    15 May 2013, 03:02 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2610) | Send Message
     
    i agree, the company had a bad quarter, but the business model isnt broken. The dividend announcement in a few weeks will push $AGNC right back to $31.
    15 May 2013, 10:51 PM Reply Like
  • RM13
    , contributor
    Comments (810) | Send Message
     
    How about MORT is a buy now.. AGNC used to be the best of breed, well, maybe not so much right now..
    15 May 2013, 10:43 AM Reply Like
  • dieuwer
    , contributor
    Comments (2409) | Send Message
     
    MORT own tons of AGNC. What's the difference...
    15 May 2013, 10:46 AM Reply Like
  • chopchop0
    , contributor
    Comments (3526) | Send Message
     
    NLY has always been best of breed IMO
    15 May 2013, 11:44 AM Reply Like
  • Cavalaw
    , contributor
    Comments (123) | Send Message
     
    We have been there before....buying opportunity....Ill load up some ARR
    15 May 2013, 10:50 AM Reply Like
  • hummerh25
    , contributor
    Comments (99) | Send Message
     
    ARR at $4. Should be a good buy.
    15 May 2013, 11:24 AM Reply Like
  • Cavalaw
    , contributor
    Comments (123) | Send Message
     
    ARR is a good buy now
    15 May 2013, 11:51 AM Reply Like
  • bagleytravis68
    , contributor
    Comments (91) | Send Message
     
    I would also like to know. Seems like most articles are saying it's on sale.
    15 May 2013, 12:14 PM Reply Like
  • Cavalaw
    , contributor
    Comments (123) | Send Message
     
    They are right...it is on sale
    15 May 2013, 12:27 PM Reply Like
  • hummerh25
    , contributor
    Comments (99) | Send Message
     
    Time will tell, i think all riets are in trouble.
    15 May 2013, 02:57 PM Reply Like
  • hummerh25
    , contributor
    Comments (99) | Send Message
     
    EPS is .78 a share, is paying out .84 can't keep that up to long.
    15 May 2013, 03:01 PM Reply Like
  • mostserene1
    , contributor
    Comments (3345) | Send Message
     
    Panic! Sell mREITs now!*

     

    *So I can buy them cheaper (*_*)
    15 May 2013, 03:04 PM Reply Like
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