Annaly Capital (NLY -2.3%) takes out not just a new 52-week low today, but slides to its lowest price since the 2001 - when the yield curve was negative. Yes, higher rates have hurt the mREITs (REM -1.2%), but some more than others. Who cut leverage at the wrong time? Who put on more hedges with the 10-year at 2.25% (good), and who put them on at 3% (not so good)?
The Q3 earnings call (transcript) revealed a management hunkered down - talking leverage to 5.4x (from 6.2) and hedges to 74% of assets from 56%. Core earnings have been in the range of $0.28-$0.32 per share for the last five quarters (compared to current $0.35 dividend), so a payout in the area of $0.30 seems likely.
CEO Denehan-Norris: "I don't think anybody, given how many people got it wrong, can sit here and sit before you and say that they know exactly when [the Fed is going] to taper and they know exactly what the impacts are going to be on mortgage assets and all assets in particular."
Annaly Q3 earnings coverage.