Seeking Alpha

American Capital results take hit from mREIT struggles

  • Net asset value per share of $18.97 is off 2.9% from $19.54 on Sept. 30, and up 6% from a year ago. Stock closed at $15.94 today.
  • 8.9M shares repurchased during Q at average price of $14.88 each, adding $0.13 to NAV per share. For full year, 40.4M shares repurchased for at average price of $13.90 each, adding $0.66 to NAV per share.
  • Fall in NAV in Q4 largely the result of the struggles of American Capital Asset Management (AGNC and MTGE) - $185M charge for unrealized depreciation due to reduction in projected management fees. There's also a $152M depreciation charge in American Capital's private finance portfolio driven by declining specific company performance, offset by $115M in unrealized appreciation in European Capital investment.
  • CC tomorrow at 11 ET
  • Press release, Q4 results
  • ACAS -5.9% AH to $15.00.
Comments (5)
  • Looks like dividends are YEARS away.

     

    Perhaps they can dramatically increase buybacks.

     

    How else can they enhance shareholder value?
    10 Feb, 05:35 PM Reply Like
  • Buybacks are already running ~$130m/quarter. Once the share price gets to BV they'll likely put at least half that capital towards dividends. Assuming the share count is about 20 mil shares lower once that happens (another 2.5 quarters of buybacks at the current rate) and earnings stay flat (they should be increasing as the economy continues to improve) this should be able to pay out about $1/year in dividends and still have another $1 per share for buybacks or to reinvest. That equals almost a 7% div yield at the $15 pps in AH.

     

    Long ACAS
    10 Feb, 08:29 PM Reply Like
  • When dividends start depends upon when the market pushes the price to about par with book value, so you can't just calculate it. There are mutual funds that have carried a discount for a long, long time. I'm OK with a consistently rising price, with opportunities to play the dips (as I likely will tomorrow!).
    10 Feb, 09:01 PM Reply Like
  • sold 1/2 of holdings for loss in '13.looks like the rest will go this year.
    10 Feb, 07:21 PM Reply Like
  • This is all AGNC mREIT pain... but it looks as though the mREIT market is coming off it's bottom ... if ACAS sells off tomorrow could be a great opportunity to accumulate
    10 Feb, 09:32 PM Reply Like
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