Hatteras continues big move following Kain purchase

|By:, SA News Editor

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.