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Mortgage REITs lead the no taper party

  • Most stocks are partying in wake of the Fed not commencing its QE taper today, but one sector of note is the beaten down mortgage REIT (REM +2.8%) group.
  • Annaly (NLY +3.2%), American Capital (AGNC +3.5%), (MTGE +2.4%), Armour (ARR +3.4%), Two Harbors (TWO +3.4%), CYS Investments (CYS +3.7%), Anworth (ANH +2.8%), Western Asset (WMC +2.2%), Javelin (JMI +2%), AG Mortgage (MITT +2.1%), Arlington Asset (AI +1.6%).
  • Yesterday, KBW called out CYS Investments as one of the more aggressive plays for those believing rates might head lower.
  • ETFs of note: MORT, MORL.
Comments (24)
  • shawster
    , contributor
    Comments (17) | Send Message
     
    Lord a mercy....Fed sees that economy not doing well !!AGNC needs to hold $1.05 divy then rise in price to Book Value . Then all will be right in REIT world.Sandler O`Neill where are you now???? SHAWSTER....
    18 Sep 2013, 02:45 PM Reply Like
  • Left Banker
    , contributor
    Comments (1994) | Send Message
     
    AGNC should announce tomorrow or Friday.

     

    If they hold that $1.05 (doubt they will myself) it really will be party time.

     

    And to think, a couple of days ago I held off at the very last minute on clicking to sell Oct 4 calls @ $24 strike price.
    18 Sep 2013, 02:52 PM Reply Like
  • johnbbbb
    , contributor
    Comments (24) | Send Message
     
    Yes, Yes, Yes! Oh what a relief it is!
    18 Sep 2013, 02:47 PM Reply Like
  • pankaj123
    , contributor
    Comments (85) | Send Message
     
    I have bought both NLY and AGNC in recent weeks and I am in green today.I will keep them at least for a couple of years because interest spread is not going to narrow until 2015 and so rich dividend are assured,can't say for this quarter though.
    18 Sep 2013, 02:56 PM Reply Like
  • Left Banker
    , contributor
    Comments (1994) | Send Message
     
    I'll tell you who else is dancing at this party: Emerging Markets and Goldbugs

     

    The biggest gainers in my portfolio on the hour
    KMI
    EEM
    DGS
    AGNC
    GLD

     

    Up 3.3-4.5%

     

    Weird.
    18 Sep 2013, 03:07 PM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    pretty much everything popping today. Metals. MLPs. REITs of all kinds, even some of my favorite beasts like MA, FLT, and SAM.
    18 Sep 2013, 05:01 PM Reply Like
  • menostonto
    , contributor
    Comments (7) | Send Message
     
    Good things happen to those who wait and don't panic. I have been in Mreits since 2010, and will probably hold on for another 2-3 years. Good extra cash in my old age.
    18 Sep 2013, 03:26 PM Reply Like
  • Cavalaw
    , contributor
    Comments (123) | Send Message
     
    Does anyone knows when ARR will announce dividends for Q4? I wonder if they will mantain it
    18 Sep 2013, 03:37 PM Reply Like
  • Javimanic
    , contributor
    Comments (234) | Send Message
     
    right now ARR is up the most of mreits. bouncing between 6.5 and 7% ^!
    18 Sep 2013, 03:42 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (776) | Send Message
     
    It's so nice when the so called experts interpret things wrong.
    18 Sep 2013, 04:27 PM Reply Like
  • Cavalaw
    , contributor
    Comments (123) | Send Message
     
    Javimanic
    Its actually the opposite......right now ARR is the ONLY one that is not partying ...it lost all its gains. after hours. after brutally cutting dividends for Q 4
    18 Sep 2013, 05:43 PM Reply Like
  • Javimanic
    , contributor
    Comments (234) | Send Message
     
    yeah, I see that DID happen. But, .07 to .05 a month...I can make it through the next 3months with a 2 cent reduction. In general, I think these mreits are creaking upward through November. Gonna be some tax loss sales in Dec of course...then we'll see what the divs will be from ARR and JMI for JAN/FEB/MARCH announced in late December I presume.
    18 Sep 2013, 07:23 PM Reply Like
  • MichaelJ8
    , contributor
    Comments (618) | Send Message
     
    arr will get sold off hard tomorrow, price will go to 3.60...
    18 Sep 2013, 09:39 PM Reply Like
  • Javimanic
    , contributor
    Comments (234) | Send Message
     
    not sure I agree. I think 6% today was enough.
    18 Sep 2013, 09:43 PM Reply Like
  • speculative
    , contributor
    Comments (622) | Send Message
     
    There is a possibility of a selloff resulting in a further drop than reflected after hours. I don't think it will go too far below $4 but I won't bet my house on it. A drop to $3.60 will be great so that adding for the lousy nickle a month will be better worth it and will dramatically allow me to reduce my cost.

     

    It is up to management to make it happen since the excuses of tapering are not an immediate threat and the fear of Larry Summers who is pro tapering is no longer a candidate.

     

    Planning for tapering right now for when it comes as it is inevitable is a responsibility and a duty expected by shareholders of management.

     

    I'm sure a management shakeup will start the ball rolling. Lets see how the announcement of others regarding their dividend payout will reflect on their counterparts.
    19 Sep 2013, 03:22 AM Reply Like
  • Dividends#1
    , contributor
    Comments (2388) | Send Message
     
    Hi speculative,

     

    Why keep buying ARR and hoping management will turn things around, when you could have AGNC with an excellent proven management team?

     

    I am just trying to help you. Good luck.
    19 Sep 2013, 09:04 AM Reply Like
  • speculative
    , contributor
    Comments (622) | Send Message
     
    Dividends#1,

     

    You are right. I don't sleep much as I am usually very excited about the market. It's not because of my holdings that keeps me up at night but because I love what I do as far as investing. It's like Christmas Eve to a child that comes every week. I wish the market was open every day of the year.

     

    I have decided to NOT add any more of my capital and just let the drip do its thing. I'll await the next quarterly report and how their future guidance is indicative and overall inclusive of their shareholders interest.

     

    They are a publicly traded company and must be reminded that shareholders have voting rights which is why it is in their best interest going forward to outperform their peers.

     

    It's not the company but those who are charged to adapt to any environment including a tapering should one be announced but to their advantage it wasn't. The level of complacency demonstrated by ARR management is surfacing and couldn't be clearer. It is time for them to look beyond the horizon and be prepared for any Fed decisions by having an action plan for any scenario instead of idly waiting to see what happens.

     

    I'm sure that someone at ARR is reading what is circulating out there and if this doesn't strike a nerve then the entire management team needs to be replaced on the grounds of unsatisfactory and substandard performance.

     

    Thanks for your feedback
    19 Sep 2013, 09:56 AM Reply Like
  • Javimanic
    , contributor
    Comments (234) | Send Message
     
    looks like I was right.
    19 Sep 2013, 05:12 PM Reply Like
  • joabe17
    , contributor
    Comments (144) | Send Message
     
    Sad, sad day for those who said our mREITs were headed for bankruptcy court.
    18 Sep 2013, 07:07 PM Reply Like
  • joe from oh
    , contributor
    Comments (3) | Send Message
     
    Think how well you'd have done by using 50% of your dividends to supplement your income and averaging into NLY by reinvesting the other 50% compounded over the past 5 years. Same could be said for PHT ($0.1375 monthly dividend every month since July / 2002) or FGP ( $0.50 / quarterly dividend since 1995!) and any number of others. Keep your powder dry for the next downturn and turn those dependable dividends into generous safe and dependable incomes with growth! No charge.
    18 Sep 2013, 10:58 PM Reply Like
  • lienonus@cfl.rr.com
    , contributor
    Comment (1) | Send Message
     
    NLY and others UP!!! So much for the talking heads and so called economic experts. The Fed did EXACTLY as it said it would. It laid out the criteria for tapering and since that criteria was not met - NO TAPERING. The talking heads and experts need to learn English and respond based on what the FED says as opposed to attempting to second guess every FED twitch. I truly hope the shorters on mREITS got roundly bruised.

     

    Dave in Sanford
    18 Sep 2013, 10:58 PM Reply Like
  • Left Banker
    , contributor
    Comments (1994) | Send Message
     
    Until -- like ARR -- they slash those dividends.

     

    I'm bailing on AGNC tomorrow -- ahead of the dividend announcement, which will likely as not come at tomorrow's or Friday's close. And I'll thank the Fed for the nice run up this afternoon when I cash it in.
    18 Sep 2013, 11:24 PM Reply Like
  • Ford289HiPo
    , contributor
    Comments (466) | Send Message
     
    NLY slices dividend by 12.5%
    19 Sep 2013, 04:50 PM Reply Like
  • speculative
    , contributor
    Comments (622) | Send Message
     
    The massive selloff of ARR shares should warrant that enough shares are available at current discount rate. That said, there should be no reason for ARR to make any attempts to announce or have a vote for an offering at any rate.

     

    An announcement of managements action plans going forward and credibly communicated openly to generate interest and get those oversold shares back on the books should do the job instead of an offering.

     

    Providing a table of expected earnings based on current business and what they are inking should provide a forecast. In my days of managing business and preparing business plans, I wrote budgets for ten years, followed by a five year, a three year and then the one year. The one year is broken down to quarters and monitored monthly and weekly to see where we are headed in regards to projections on the quarters budget. If we're falling short, immediate adjustments are made to meet the goals forecasted.

     

    While ARR's business is different from what I specialized in, budgets are applicable to any business as I wrote budgets for businesses that were failing and brought them to profitability.

     

    Management needs to know where they are, where they need to be and have a clear plan to achieve projections that are laid out in the best interest of shareholders and prospective investors. Of course, the three year and above budgets adjust based on business climates such as tapering and so does the activity directed by management to make budgeted projections.

     

    The relentless pursuit of excellence is absent as evident if it was necessary to cut the dividend based on their last quarters result. They should have know in the first month of the quarter that they had a shortfall and the second month was in jeopardy. What was done to ensure goals were met? Planning another offering? Calculating how much money goes directly into their pockets?

     

    If their salaries were tied to the increasing of the dividend, we would be seeing a dividend that would attract investors of all types. At the same token, any dividend cuts should be imposed on their salaries as well. In this last dividend announcement, it should have included that all members of management received a pay cut of 28.5%. If this were to happen, just take notice how quickly the dividend will climb. As long as their salaries are provided just for reporting to work, nothing else would matter.

     

    Any announcements requesting shareholders approval for an offering should be declined by holders to prevent the lining of their pockets and diluting share value when plenty of shares have been sold off.

     

    Management needs to sell the current available inventory before placing another order. They should have a client base wanting to borrow. Are they chasing them down and closing the deals? If they don't come to you, you go to them and make it happen.
    Diversification is not just for investors, businesses must do the same to not only survive, but to excel. It's a competitive world and. to make it to the top, ARR needs to hustle hard and get their share of the pie; not the crumbs they are passing to shareholders in the form of a measly 5ยข dividend.

     

    Harsh words here in exchange for a harsh dividend cut. Maybe a buyout by a better managed reit is what we need and send this selfish team packing.

     

    It is time to deliver and deliver BIG. Their livelihood depends on stellar results and no less.
    23 Sep 2013, 01:07 AM Reply Like
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