Seeking Alpha

More on the Annaly (NLY) downgrade: The company is "in a pickle," says FBR, far more...

More on the Annaly (NLYdowngrade: The company is "in a pickle," says FBR, far more exposed to prepayments than its mREIT brethren. A continuation of the constant prepayment rate near 20% will cause more rate spread contraction, book value erosion, and a H2 dividend cut. Just to maintain earnings (and the divvie) this Q, Annaly was forced to sell and book gains from its MBS portfolio. Shares -2.6% today.
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Comments (12)
  • montanamark
    , contributor
    Comments (1452) | Send Message
     
    this was trading 15 a year ago with better fundamentals
    6 Aug 2012, 05:17 PM Reply Like
  • itscalledcommonsense
    , contributor
    Comments (1228) | Send Message
     
    Markets supposedly look forward. Err, wait a second...
    6 Aug 2012, 06:01 PM Reply Like
  • vandob
    , contributor
    Comments (49) | Send Message
     
    sold last week at 17.30 when story of dividend paid via capital gains on bonds broke. Don't think there's much upside at this point. Plenty of time to buy in at a lower price and get the next dividend.
    6 Aug 2012, 05:48 PM Reply Like
  • motleythecat
    , contributor
    Comments (3) | Send Message
     
    Sold out of NLY and HTS today. Added to my AGNC position.
    6 Aug 2012, 06:11 PM Reply Like
  • John Krug
    , contributor
    Comments (30) | Send Message
     
    This stock will hit $20 before it goes down. The fundamentals are very strong. Clearly the best of the REITs.
    6 Aug 2012, 06:52 PM Reply Like
  • saltspring
    , contributor
    Comments (14) | Send Message
     
    who/what is fbr ?
    6 Aug 2012, 07:10 PM Reply Like
  • kenmanblue
    , contributor
    Comments (5) | Send Message
     
    fbr is FBR Capital Management. The article was written by them, and published in Barrons. You can read a small part of the article by clicking on "in a pickle". You have to subscribe (pay) to read the entire article.
    6 Aug 2012, 07:41 PM Reply Like
  • harryjack
    , contributor
    Comments (531) | Send Message
     
    Short term lower price just raising the yield. I will not complain. Long term issues? Not if you compare the article to $NLY's portfolio structure. I am not ready to be a trader, just take my 13+ % dividend and sleep on the beach
    6 Aug 2012, 10:36 PM Reply Like
  • mvidetto
    , contributor
    Comments (3) | Send Message
     
    NLY has been in a rising channel since its April bottom of $15.50. It's chart broke today when it left that rising channel when it dropped below $16.96. I am a seller.
    7 Aug 2012, 12:14 AM Reply Like
  • biscuitx
    , contributor
    Comment (1) | Send Message
     
    Google "Annaly Capital Could Cut Its Dividend" and click on the link from google to the barron's article if you want to see the entire article.
    7 Aug 2012, 12:38 AM Reply Like
  • kingdad
    , contributor
    Comments (1166) | Send Message
     
    ALL the mReits are slowing down at this time and experiencing some consolidation and profit taking after a 1st half of the year that was just too good to be true. Good Capital Gains with good dividends are now falling prey to the Fed's manipulations.

     

    The Fed continues to push Operation Twist to squeeze the spread and with QE3 being discussed as a hoped for reality by brokers and traders the dilution of the US Dollar would continue and the hoped for run to Stocks would be realized.

     

    But let's be real.the EU is in dire shape, Asia is contraction and their manu. base is slowing and exports dropping there. Drought in the World's breadbasket is not good news and inflated food prices are already making their way onto the store shelves and Consumer confidence here continues to drop. This constant BS from analysts trying to make money on Market churn is getting ridiculous. False Optimism seems to be the rule of the day. Just be careful, make sure to double check your due diligence before trying to get too greedy out there. The UK is already in its double dip recession and if it wasn't for US politics we'd there already too.

     

    the Reit Sector is still the best game in town if one is looking for returns and a steady income stream that isn't being eroded by Inflation (CDs, MMs, Treasuries, etc.)
    7 Aug 2012, 03:59 AM Reply Like
  • rcf0924
    , contributor
    Comments (3) | Send Message
     
    What amazes me is how many articles I have read over the last 3 months that extoll the experience and savvy of NLY's management team. Every article mentions the risks, including the prepayment risk. With the release of this analyst's piece, and the drop of the share price they are telling me that this analyst knows something about the business that management doesn't. Also, the company failed to consider, plan for, and deal with one of their major risks? Or is the company lying to us as inferred by the text of the downgrade? I hadn't bought NLY yet but own a lot of AGNC which dropped further than NLY, presumably because they have the same problem?
    7 Aug 2012, 09:11 AM Reply Like
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