Mortgage REITs a port in the storm today

What's working today? With the exception of Western Asset Mortgage which had a massive secondary offering, the mREIT sector is nearly universally higher as money rushes out of the previously perkier areas of the market.

Not hurting is a seven basis point decline in the 10-year Treasury yield to 2.73%.

Up the most are the two largest and also investor favorites Annaly (NLY +1.4%) and American Capital Agency (AGNC +1.3%). Others: CYS Investments (CYS +1%), American Capital Mortgage (MTGE +0.5%), MFA Financial (MFA +0.5%), Dynex (DX +0.9%), Armour (ARR +0.5%).


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Comments (16)
  • CornStove
    , contributor
    Comments (219) | Send Message
    It makes me wonder if the ANALYSTS covering these companies really know what they are talking about (or NOT talking about)!!!!!
    4 Apr 2014, 04:02 PM Reply Like
  • Jerbear
    , contributor
    Comments (1275) | Send Message
    You will learn that analysts are the worst source of information on any stock. During the crash they were proven to be totally incompetent. Amazing how they are still around.
    4 Apr 2014, 07:24 PM Reply Like
  • notta lackey
    , contributor
    Comments (131) | Send Message
    They are around because they helped liquidate their bosses inventory at a profit.
    6 Apr 2014, 07:32 PM Reply Like
  • bill d
    , contributor
    Comments (1893) | Send Message
    Isn't that illegal if they were trading it?
    4 Apr 2014, 04:09 PM Reply Like
  • speculative
    , contributor
    Comments (1660) | Send Message
    Sure does sound illegal.
    4 Apr 2014, 04:43 PM Reply Like
  • William Packer
    , contributor
    Comments (1094) | Send Message
    i knew about it. not gonna lie. wmc has been trading well above book value for some time. anyone with half a brain would have rotated out of wmc long ago.
    4 Apr 2014, 07:04 PM Reply Like
  • Dividends#1
    , contributor
    Comments (4346) | Send Message
    Hi William,


    Actually, Scott Kennedy wrote a whole article warning about WMC. I do not recall you warning anyone in advance. It is easy to make a call after the fact. You are being quite rude to the other members.


    I do recall you and I disagreeing about the ten year's direction. So far you have been wrong on that call as the 10 year continues to stay surpressed.
    4 Apr 2014, 07:54 PM Reply Like
  • mayalar2012
    , contributor
    Comments (70) | Send Message
    I had a gut feeling about this considering all that has happened, so I got out totally just a few days before I saw the ticker down to $14+. Thanks to my strong instincts - which I usually follow. Of course I bought back in.
    5 Apr 2014, 03:47 AM Reply Like
  • KRT_investor
    , contributor
    Comments (339) | Send Message
    I agree....and I did....and now I am back in at $13.59.
    5 Apr 2014, 10:30 AM Reply Like
  • William Packer
    , contributor
    Comments (1094) | Send Message
    if you see my latest posts on stock talks, prior to the friday jobs report.. you will see i made several calls for a stable 10 year. see $mtge stock talks. i did not make comments on wmc because i am not here to hold others hands on seeking alpha. i have met privately with various investors that i assist with financial matters on wmc and the mortgage reit space in the past 3-4 months. i have always adviced to avoid wmc ever since they declared the part cash and part stock dividend. Those investors sold prior to that distribution and reinvested in mtge, two, hts, and chmi. i was not trying to be snotty, i was simply stating that wmc has traded well above book value for sometime. it was certainly no surprise to me and many others who follow the mortgage reit universe that they conducted a public offering.
    5 Apr 2014, 05:06 PM Reply Like
  • bill e club
    , contributor
    Comments (55) | Send Message
    Maybe you should use your other half by enrolling in a course in polite discourse.
    5 Apr 2014, 11:20 PM Reply Like
  • gabby1945
    , contributor
    Comments (2695) | Send Message
    Jerbear: << During the crash they were proven to be totally incompetent>>


    If you will remember, the dot com era was laced with most everyone trying to justify the meteoric rise of tech with no earnings, being a time where the future prospects outweighed fundamentals. They wanted to rewrite the fundamental paradigm trying to explain the inexplicable.
    Momentum stocks follow that same pattern of irrational multiples with hopes that the equity will grow into these high PE's with increasing future earnings. All who shorted these equities soon ran large deceits proving once again irrationality can outlast ones' cash. Those analysts (limited number) who raised concerns for months soon had to revert and join the hoards using fuzzy logic to justify the actuality of what was happening. When the bubble burst, the blood lined the streets touching almost everyone, including the fundamentalist who had no part in this trip to "Wonderland."
    Running around sounding like "Chicken Little" eventually will get you branded as "Chicken Little," probably long before one's premise proves to be true. There are few financial experts who have the stones to swim against the tide until they are proven correct in their thinking, and it is usually people like Art Cashin, or Jack Bogle with little hair or very gray hair.
    4 Apr 2014, 09:26 PM Reply Like
  • exmrfvc
    , contributor
    Comments (47) | Send Message
    If Art Cashin taught a class in Stock Market history, I would sign up in a minute. Best 3 minutes on CNBC.
    5 Apr 2014, 09:46 AM Reply Like
  • tstreet
    , contributor
    Comments (1035) | Send Message
    Frankly, I don't see the secondary as a big deal. MREITs issue secondaries all the time and it is a fundamental part of what they do. Yes, the stock gets diluted and is down for awhile but the money is used to buy more MBS and increase the earnings.


    The first time I experienced a secondary, I remember freaking out a bit looking at what had happened at the stock price. But it is just what these companies due to expand their holdings and it is not the end of the world.
    5 Apr 2014, 02:50 PM Reply Like
  • gabby1945
    , contributor
    Comments (2695) | Send Message
    No it is not the end of the world unless they cut dividends due to their particular cases and not a social/economic event that drags everything down below what is reasonable. Case in point would be BWP falling off a cliff after a radical cut in distributions. When one alters dividends from the norm, one could consider that a yellow flag. I'm referring to the change from cash to a partial DRIP (WMC). If the payment was a few days after the announcement and the stock price dropped appreciably, then you were rewarded with more shares or fractional shares because of the stock price reduction. They basically gave you a tax advantage by deferring gains until you actually sell the shares collected from dividend payments.
    I have no position and don't really follow that stock, but I've seen similar equities trip up investors trying to conserve cash flow. Who knows? They may have done shareholders a favor in the long run, and when the shock wears off and time passes, we may see the results justifying the means....or not.
    6 Apr 2014, 12:11 AM Reply Like
  • rsykes73
    , contributor
    Comments (74) | Send Message
    Curious as to whether anyone here has considered doing a tax swap with their mreit holdings. My capital gains losses are with ARR and all long term so it only represents a 15% write off. Prices have been fairly stable, however with the announcement for the increased share buyback authorization I suppose I'll wait to see what comes of the next quarterly report, then perhaps see if I can get it right.
    6 Apr 2014, 08:40 AM Reply Like
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