Margins shoot higher at Annaly; +1.8% AH


Core earnings of $0.35 per share compares to $0.28 for Q3, $0.32 a year ago, and the most recent dividend of $0.30. End of year book value per share of $12.13 is down from $12.70 in Q3 and $15.85 a year ago. Today's close of $10.87 is a 10.4% discount to Dec. 31 book (which is almost certainly higher today than it was on Dec. 31).

Interest rate spread of 1.43% is up a whopping 36 basis points from Q3 and 49 bps from a year ago. Better yield on investments was driven by lower prepayment speeds: CPR of 7% vs. 13% in Q3, 20% a year ago. Funding costs of 2.33% rose 31 bps from Q3, rose 80 bps from a year ago.

Company continues to diversify away from fixed 30-year agency MBS paper, with commercial assets now accounting for 14% of stockholder equity. Agency MBS portfolio of $73.4B vs. $83B in Q3, $127B a year ago.

Leverage of 5.0:1 compares to 5.4:1 in Q3, 6.5:1 a year ago.

CC tomorrow at 10 ET

NLY +1.8% AH

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Comments (16)
  • Captain Pike
    , contributor
    Comments (890) | Send Message
     
    yippee
    25 Feb 2014, 06:14 PM Reply Like
  • TopHill4
    , contributor
    Comments (42) | Send Message
     
    Good show.
    Lots of insider buying might have been a clue.
    25 Feb 2014, 07:03 PM Reply Like
  • Nitrexx11
    , contributor
    Comments (145) | Send Message
     
    Looks like the bottom is officially in
    25 Feb 2014, 07:26 PM Reply Like
  • newnnly
    , contributor
    Comments (388) | Send Message
     
    Great long term income play. The lucrative entry at current price will slowly decrease. LONG $NLY
    25 Feb 2014, 07:31 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11220) | Send Message
     
    Remember those who were talking about a sub-$9 in 2014 NLY just last month?
    25 Feb 2014, 08:28 PM Reply Like
  • chopchop0
    , contributor
    Comments (5199) | Send Message
     
    yup. kicking myself for not backing up the truck more in the single-digits.
    25 Feb 2014, 10:38 PM Reply Like
  • manonthemoon
    , contributor
    Comments (11) | Send Message
     
    My opinion: These are VERY significant, favorable statistics for NLY. Of interest is the "whopping" widened interest rate spread, but also note the fact that a share price of $10.87 earlier today was a 10% discount to the December 31 book value AND that the book value is "almost certainly higher today than [then]," furthering the case for NLY being quite undervalued even after today's after-hours bump higher. They are also doing things the investor community has wanted, such as decreasing leverage by 23% from a year ago, and increasing commercial asset allocation. Not only could an investor ride a reversion trend back to a still-much-higher book value, but if the interest rate spread has increased by 33% (1.43% vs former 1.07%), an investor could potentially see a dividend hike in the future.
    25 Feb 2014, 08:32 PM Reply Like
  • macronaut
    , contributor
    Comments (93) | Send Message
     
    NLY up $.25 in after hours trading (NASDAQ). This should spur buying in the entire sector since NLY and AGNC are proxy for the agency mReits. Clean out the shorts too.
    25 Feb 2014, 08:33 PM Reply Like
  • gharleynga
    , contributor
    Comments (2) | Send Message
     
    Its been good ride since january 1st.
    25 Feb 2014, 08:35 PM Reply Like
  • Atharion
    , contributor
    Comments (12) | Send Message
     
    Bought in at $16, right before the bottom fell out...:(

     

    Glad to see some signs of life in this stock and improving market conditions. Staying long with the hope that dividend reinvestment and share price increases will see me profitable sooner rather than later.
    25 Feb 2014, 09:52 PM Reply Like
  • newnnly
    , contributor
    Comments (388) | Send Message
     
    @Atharion

     

    I bought 100 shares at $15.57 about the same time. I added shares recently at 10.98, 10.68 and 9.86. Got a lot of dividends on Jan 31 and I'm only down a little now. I think some more people are starting to pull the trigger now and 2014 will be a lot nicer to mreits.
    26 Feb 2014, 07:49 PM Reply Like
  • Getting there, One day at a...
    , contributor
    Comments (3) | Send Message
     
    I have continued buying down my cost basis. I am glad I have. :)
    25 Feb 2014, 09:52 PM Reply Like
  • WPSPIKER
    , contributor
    Comments (1149) | Send Message
     
    I loaded up the truck in single dig, when tax loss selling hit it hard. BUT only in my IRA account to avoid the funky tax issues in taxed accounts.

     

    M
    26 Feb 2014, 12:22 AM Reply Like
  • chopchop0
    , contributor
    Comments (5199) | Send Message
     
    shouldn't be any funky issues. This is a REIT, not an MLP. The distributions are unfortunately taxed as ordinary income
    26 Feb 2014, 06:05 AM Reply Like
  • IrishTD
    , contributor
    Comments (14) | Send Message
     
    All the more reason to have it in an IRA.
    26 Feb 2014, 09:03 AM Reply Like
  • WPSPIKER
    , contributor
    Comments (1149) | Send Message
     
    Was thinking about (AT) that I only put into my IRA due to Canadian tax laws, (NLY) I DO have it both, :/
    M
    26 Feb 2014, 10:16 AM Reply Like
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