Seeking Alpha

Hatteras continues big move following Kain purchase

  • American Capital Agency (AGNC +0.2%) late last week disclosed a 7.5% stake in Hatteras (HTS +1%), part of AGNC CIO Kain's plan of buying up shares in agency mREITs selling at substantial discounts to book value.
  • American Capital Mortgage (MTGE +0.2%) appears to own a 1% stake, putting American Capital's investment in total at 8.5% of the company.
  • We're still waiting for Hatteras' Q4 results, but book value per share was $21.31 at the end of Q3. Kain likely started buying up HTS in Q4 when the stock - following a big dive post Q3 earnings - was meandering around the $16.50 level.
  • At $19.02 at the moment, the shares still trade at a 10.7% discount to September 30 book. They're up 16% YTD.
Comments (3)
  • patriot_invstr
    , contributor
    Comments (38) | Send Message
     
    Is $AGNC becoming a de facto mREIT ETF?
    11 Feb, 11:44 AM Reply Like
  • Dividends#1
    , contributor
    Comments (1936) | Send Message
     
    patriot,

     

    AGNC is NOT becoming a de facto mREIT ETF. I would NOT invest in any ETF's. AGNC is a top notch AGENCY mREIT. Gary Kain thinks and acts outside the box. AGNC will probably sell the mREITs they bought after the gain reaches their target price. This is a short term strategy.

     

    Most people here are over thinking and over analyzing this.
    11 Feb, 05:18 PM Reply Like
  • patriot_invstr
    , contributor
    Comments (38) | Send Message
     
    @div - thanks for the reply. I wouldn't mind if it does become a de facto mREIT ETF, I am long AGNC. I do wonder about the tax consequences of the strategy, if there are any. I also think Mr. Kain is being wise and I am looking for a successful outcome to his strategy.
    11 Feb, 05:36 PM Reply Like
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