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More on American Capital Agency (AGNC): Annualized ROE of 22% in Q2 - dividend of...

More on American Capital Agency (AGNC): Annualized ROE of 22% in Q2 - dividend of $1.25/share plus $0.35/share gain in book value. Net interest spread of 1.65%, down 66 bps from Q1. Leverage ratio of 7.6:1, down from 8.4:1 in Q1 (as comparison, Annaly is 6.1:1). $78B portfolio - $322M raised through offerings in Q2. At $35.04, shares trade at 19% premium to BV. Shares -0.3% AH. (PR)
Comments (13)
  • AGNC does it again!! Looking forward to the price action ahead of the ex-date.
    2 Aug 2012, 05:10 PM Reply Like
  • when is the ex date, pls.
    2 Aug 2012, 05:26 PM Reply Like
  • Last one was 6/19 so probably about 9/19 but I don't think it's announced yet.


    2 Aug 2012, 05:51 PM Reply Like
  • I have held AGNC on and off for a couple of years, made money.
    Sold last week when the earnings were off and selling over book value.
    Stock still went up.
    Bought ACAS this morning, $4.00 below book value.
    Up 2% since purchase this morning.
    Better value.
    2 Aug 2012, 05:15 PM Reply Like
  • ACAS will not pay dividends until stock price and book value narrow.
    2 Aug 2012, 05:52 PM Reply Like
  • Here's what their 8K showed:



    $1.58 comprehensive income per common share, comprised of:

    $(0.88) net loss per common share

    $2.46 other comprehensive income per common share

    $0.94 net spread income per common share

    Comprised of interest income, net of cost of funds (including interest rate swaps) and operating expenses

    $1.05 per common share, excluding approximately $(0.11) per common share of "catch-up" premium amortization cost due to change in projected constant prepayment rate ("CPR") estimates

    $1.62 estimated taxable income per common share

    $1.25 dividend declared per common share

    $1.61 estimated undistributed taxable income per common share as of June 30, 2012

    Increased $0.33 per common share from March 31, 2012

    Represents an increase of $108 million from March 31, 2012 to $492 million as of June 30, 2012

    $29.41 net book value per common share as of June 30, 2012

    Increased $0.35 per common share from $29.06 per common share as of March 31, 2012


    I like the fact that their book value increased slightly, but I don't understand the $.88 loss per common share. Can anyone explain?


    2 Aug 2012, 05:32 PM Reply Like
  • Hi Chuck, Is that all you don't understand? I have to admit the language in this 8K is very confusing .. What was their loss per common share last qtr ?
    2 Aug 2012, 06:29 PM Reply Like
  • I'd like to be sure I'm interpreting this correctly ... 1.65% x 7.6 = 12.54% total return this quarter vs. 2.31% x 8.4 = 19.4% last?
    That doesn't sound good. Am I missing something?
    2 Aug 2012, 07:36 PM Reply Like
  • The $0.88 loss per common share gets into a whole multitude of possibilities, including pre-payments, booked losses on bad calls (missing the target spreads on the mbs they purchase), mark to market, and it can go on and on. We should get a better understanding once we get the transcripts from the call.
    2 Aug 2012, 08:48 PM Reply Like
  • Well, they seem to be patting themselves on the back. I guess they don't think (0.88) is so bad.
    3 Aug 2012, 01:20 AM Reply Like
  • The thing I don't understand is why the shares grew after hours (+0.51%) when it should be the opposite. May be it will change when the market opens.
    3 Aug 2012, 03:38 AM Reply Like
  • Looks like people noticed the same thing we did- AGNC down .17 this morning. That said, I bought some.


    3 Aug 2012, 09:53 AM Reply Like
  • This should bring most REITs back down to book value where they belong. These are high risk stocks not safe havens, and should only be used as a yield enhancer not a core position.


    Rates are getting worse, and pre-payments are increasing, both not good for yield on the their portfolios.
    7 Aug 2012, 02:05 AM Reply Like
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