You've got to take risk to earn money, says Annaly Capital (NLY +1.2%) management, pressed on the earnings call for its somewhat aggressive stance even as it believes short-term rates are set to rise.
There just aren't a lot of great values out there in fixed-income at the moment, says the team, and the mREITs may be one of the last cheap asset classes (Annaly trades at a 15% discount to book).
Sterne Agee upgrades Annaly to a Buy following the earnings beat and big rise in book value. Compass Point reiterates its Neutral rating, saying the removal of hedges was behind the big Q2.
Previously: Annaly on sale after big gain in book value
Previously: Annaly Capital Management beats by $0.03