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Agency mREITs continue to merit caution even after big declines, says Citi. Even if the scare of...

Agency mREITs continue to merit caution even after big declines, says Citi. Even if the scare of higher long-term rates may be priced in, around the corner could be worries of short-term rate hikes (and a flatter yield curve). Citi expects Q2 reported book values to be off 10-15% and asset sales combined with increased hedging to negatively impact future earnings. Price targets are cut at AGNC and NLY. Among other agency players: ARR, HTS, CYS, CMO, AMTG.
Comments (18)
  • Caraita
    , contributor
    Comments (41) | Send Message
     
    So if the book values are going to be off 10 to 15 % and it was a 30 to 40% correction the bounce should be around 15 to 20%
    9 Jul 2013, 11:12 AM Reply Like
  • Chazuu
    , contributor
    Comments (156) | Send Message
     
    I bought in at $20.93 on Friday.
    Here's hoping for a good bounce!
    9 Jul 2013, 11:25 AM Reply Like
  • COBeeMan
    , contributor
    Comments (1479) | Send Message
     
    Which stock did you buy? AGNC?
    9 Jul 2013, 12:48 PM Reply Like
  • Wileycoy
    , contributor
    Comments (52) | Send Message
     
    I'm sick and tired of the "Gloom & Doom" people writing (for pay) on the downside of REITS. Everyone has had enough of that talk after six month. Why don't the people writing articles move elsewhere? They have wore out their welcome - there are positives they haven't considered writing about. Maybe these writers are "short" sellers!
    9 Jul 2013, 11:37 AM Reply Like
  • very_thirsty_for_income
    , contributor
    Comments (558) | Send Message
     
    I'm with Wiley and Chazuu.

     

    That's right,enough is enough already. But all this negativism contributes to the pessimistic daily sentiment that pushes the AGNC price down to very attractive levels. And the dividend yield is 19-20 % . I have accumulated more shares on Friday after the precipitous drop at the open.

     

    My plan is to steadily increase the number of shares I own so that I can achieve a high level of income. I hope that the current dividend payout is sustainable, and in this regard, I am anxious to find out what the current AGNC book value is.

     

    Sincerely,

     

    VTFI
    9 Jul 2013, 12:44 PM Reply Like
  • speculative
    , contributor
    Comments (682) | Send Message
     
    VTFI, great job getting in so low. Many will be talking about how they could have but didn't and you did great. I too have added anywhere between 10-20% more of ARR, NYMT, AINV, CIM, CFP and my dividend income has increase an average of 12% between them all. Let the negatives hold the price where it is at so I can go through my couch and find more money to invest before the ascent.

     

    I hope you maximize your income and achieve your goals while others watch.

     

    Spectators are always welcome.
    9 Jul 2013, 12:55 PM Reply Like
  • RoberHD05
    , contributor
    Comments (71) | Send Message
     
    Wiley,

     

    I have been thinking the same thing. It is easier to generate some bogus down push than it is explain the positive. I am long ARR, AGNC and MTGE. Their dividends will see me through this.
    9 Jul 2013, 11:56 AM Reply Like
  • clark441122
    , contributor
    Comments (27) | Send Message
     
    I'm with you Wiley.
    9 Jul 2013, 12:04 PM Reply Like
  • Caraita
    , contributor
    Comments (41) | Send Message
     
    At these prices and if you are in for the long haul an investor in these should have nothing to worry about.( with dividend reinvestment) Right now though it seems as if the banks and the news media are chiming together to take them down. At some point they will stop and all of a sudden find them a buy again. Its just always hard when you are in the wrong cycle.
    9 Jul 2013, 12:05 PM Reply Like
  • ChuckJ
    , contributor
    Comments (78) | Send Message
     
    Agreed. We're early in the dividend cycle and we've got the numbers coming soon. I plan to look for upward movement right before the numbers are released.
    9 Jul 2013, 06:23 PM Reply Like
  • richbar
    , contributor
    Comments (864) | Send Message
     
    I look for a big pop in AGNC after they report later this month and everyone sees that the decline in book is less than expected and that income is greater than expected. I see them maintaining their dividend this year and increasing it next year. When the Fed raises short rates starting in 2015, they'll keep a steep yield curve to promote growth. Spreads will be much higher at that time than they are now. Very positive for all mREITs.
    9 Jul 2013, 12:06 PM Reply Like
  • speculative
    , contributor
    Comments (682) | Send Message
     
    I have very little respect for Citi and their opinions as they couldn't even hold their own having done a reverse split 1/10 back in May 2011. This was while they stopped and then reinstated a pitiful dividend of .01 cent that cost more to process than it was worth. Great companies split forward, not backwards. This is equivalent to a 600 pound obese person working as a personal trainer trying to get you in shape. Their recent doubling from their 52 week low is great for those who bought in the 20's as I did when I added to my pre-reversal split to lower my cost and realize a gain. C is a joke and should be embarrassed to comment or analyze another company's or sectors finances. Maybe they should be advising companies on reverse splits.

     

    As far as the Agency mREIT sector, even it drops a bit more, it should outperform C on the top and the bottom by comparison and they'll compensate their investors well while we wait.
    9 Jul 2013, 12:09 PM Reply Like
  • tstreet
    , contributor
    Comments (833) | Send Message
     
    While I am sympathetic to the above comments, and while I have little respect for these hit and run analyses by the likes of Citi, thus far they have seemed to have an effect whether we think it is rational or well reasoned or not. So, while I am going to hold what I have left I will hedge until we start getting some decent analysis. Any additional buys will be with calls as they are synthetic hedges.
    9 Jul 2013, 01:40 PM Reply Like
  • tubbyo
    , contributor
    Comment (1) | Send Message
     
    Insiders recently bought 3,000,000 shares. Might be good time to buy.
    9 Jul 2013, 03:11 PM Reply Like
  • ChuckJ
    , contributor
    Comments (78) | Send Message
     
    3,000,000 shares of AGNC?. Can I ask where that's documented? SEC filings?
    9 Jul 2013, 06:30 PM Reply Like
  • wiseone123
    , contributor
    Comments (206) | Send Message
     
    Daer Richbar,

     

    During the first week of August, management of NLY will be releasing their SEC filing for the results of the 2nd Quarter 2013, along with their Supplemental Information Sheets. The Consolidated Statements of Comprehensive Income should contain the figure for Unrealized Gains and Losses. If Losses are shown this represents the quarterly decline in book value. During the first quarter of 2013, this figure was a Loss of approximately $1.3 billion. If it shows an increase in the Loss in the second quarter, with little or no income gains, it is questionable whether the dividend rate can be maintained. Things should be much better after the first quarter of 2014, provided short term interest rates remain unchanged.
    9 Jul 2013, 03:33 PM Reply Like
  • Chazuu
    , contributor
    Comments (156) | Send Message
     
    COBeeMan.
    Yes. I bought AGNC at $20.93 on Friday.
    10 Jul 2013, 09:19 AM Reply Like
  • speculative
    , contributor
    Comments (682) | Send Message
     
    Congratulations Chazuu...you did well and I wish you great success. I don't have any AGNC as I tapped myself out with others in the sector but if I had additional funds, I would have been joining you. Hopefully it will stick around under $21 long enough to get in on this great deal.
    10 Jul 2013, 10:54 AM Reply Like
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