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A big player in the mortgage REIT sector catches an upgrade amidst the sell-off, American...

A big player in the mortgage REIT sector catches an upgrade amidst the sell-off, American Capital Agency (AGNC -3%) being moved to Buy from Hold at Sterne Agee. Shares were down about 8% at the session lows.
Comments (37)
  • jerryW01
    , contributor
    Comments (14) | Send Message
     
    So many conflicting articles either AGNC is good or bad with OE3......

     

    The drop of 8% is incredible....to me I don't know if any information presented on this site is credit worthy......

     

    Take a stance on a stock - one way or the other instead of offering what if's.....
    15 Oct 2012, 02:45 PM Reply Like
  • zhoubish
    , contributor
    Comment (1) | Send Message
     
    There are many aspects and factors of a stock. Different people focus on difference things when they offer advice. This upgrade seems triggered by technical rather than fundamental factors to me. Don't get confused. Set your own parameters and don't swing along with whatever posted on this web site, or any web site.
    15 Oct 2012, 03:29 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2499) | Send Message
     
    This is a news feed, so its reporting news on the stock, not offering an opinion. The rest of the site is article puts together by hundreds of different contributors, all with different opinions, experience, and risk levels.

     

    It takes two people to make a trade, a buyer and a seller, so of course you are going to have different opinions. Also, intelligent people change their opinions as the facts change. The effects of QE 3 are still murky at best, so it makes sense that there is some confusion. That 8% slide is a 2.5% slide now, and since volume has tapered off compared to what it was early, I'll attribute the drop to either funds dumping shares, panic selling, or a little bit of both. Either way I expect a decent bump to book value when they report the quarter, as well as a good deal of insight about the business. AGNC was planning for QE 3, so we'll see how their hedging has held up.
    15 Oct 2012, 03:42 PM Reply Like
  • Boff
    , contributor
    Comments (2) | Send Message
     
    Great advice. It's easy to feel like a ping-pong ball.
    15 Oct 2012, 05:20 PM Reply Like
  • QuantumAnalysis
    , contributor
    Comments (2) | Send Message
     
    where is a better place to make this type of return with a government guarantee and up turn in the housing market?
    15 Oct 2012, 02:48 PM Reply Like
  • MexCom
    , contributor
    Comments (3051) | Send Message
     
    You got to be kidding!
    16 Oct 2012, 05:47 AM Reply Like
  • piggysun
    , contributor
    Comments (121) | Send Message
     
    buy as many as you can, as long as you feel comfortable. I just loaded more AGNC @ 30.4 this morning, not the bottom, but feel happy now
    15 Oct 2012, 02:50 PM Reply Like
  • MexCom
    , contributor
    Comments (3051) | Send Message
     
    If you think yesterday was bad. Wait to you see the second race in this daily double. Those still holding will be carried away by the cops like what I saw as a kid after seeing a loser carried off the race track crying "Leave me alone - I lost, I lost."

     

    The best way to make money is to first not lose it.
    16 Oct 2012, 05:51 AM Reply Like
  • ksaeed
    , contributor
    Comments (19) | Send Message
     
    I bought AGNC at $31.33 this morning... they've got a good management team. Gary Kain, AGNC's President and Chief Investment Officer, bought $655K worth of AGNC on 8/7/2012.
    15 Oct 2012, 03:40 PM Reply Like
  • kingdad
    , contributor
    Comments (893) | Send Message
     
    Too many people, analysts included, are over-reacting to the QE3 situation. QE3 hasn't been in effect long enough for any conclusions to be drawn based upon fact. what we are seeing is the Obama admin.'s HARP program lowering the standards and allowing previously unqualified people to now apply for refinancing under that program in an election year bid to buy votes. In all likelihood QE# could be the place for the mRFeits to offload their losers as the FED could be forced to buy them up.
    15 Oct 2012, 03:41 PM Reply Like
  • John P Ward Jr
    , contributor
    Comments (30) | Send Message
     
    I don't think it is SA's role to take a position on a stock or sector, I think their role is to be an aggregator and publisher of other's comments on particular securities and industries.........the bet for or against AGNC is pretty simple..........sell if i) you think mortgage prepayments (triggered by the Fed's action to buy MBS in order to lower insterest rates) will hit AGNC hard even though they have a high concentration of low interest mortgages in their agency backed RMBS pools that are unlikely to get refi'd, ii) they won't be able to reinvest that capital returned to them, from the pre-payments, at rates that'll generate effective net interest spread income for dividends, iii) the increase in book value of their agency backed RMBS pools due to the upward pricing pressure from Fed purchasing demand won't increase the book value per share and drive a higher share price and iv) that AGNC will be unable to lower their borrowing costs (by using derivatives to hedge or simply restructuring their loan agreements with their lenders) in order to maintain the current spread levels between the mortgage interest they're recving and the cost of the funds they use to purchase those mortgage pools ..............if you think the opposite of points i - iv, then you're a buyer of AGNC at these levels..........Not an easy decision but an uncomplicated one..........I own AGNC and some other mREITS, and think that the Fed's actions (in the kind of size and for the open-ended duration they've stated) make these waters uncharted.........for me, it comes down to whether or not I think these mREIT managers can adjust their own borrowing costs down to defend the spread as mortgage rates fall........I think the good managers are likely to do so (or have already done so) and while there will be near term volatility, the yields on the mREITS are compelling even if they were cut in half...........let's recall that the 5 yr treasury note is yielding 0.67% today..........the 13% additional yield points you get in companies like AGNC certainly compensate one for some risk unless you're a short term trader...............I like the fact that SA publishes alternative points of view........hope this one was helpful.............
    15 Oct 2012, 03:46 PM Reply Like
  • AlbyVA
    , contributor
    Comments (567) | Send Message
     
    Maybe it's just me, but I seriously doubt the Fed is pumping $40/billion a month into the Mortgage Backed Security market vs. the Bills, Notes, and Bonds of the Federal Government.

     

    When you think about it, MBS might be backed by the Government, but the Government has NO CASH to backup that paper. It would have it issue debt, which doesn't offer the Fed much security, because in the end, the Fed would have to save itself by purchasing Government Debt.

     

    My theory is that very little of that $40/billion a month is going into MBS. The vast majority is going into Government backed paper. So the impact on MREITS is likely nil.

     

    Call me crazy, but I just don't see the Central Bank of the United States loading up it's balance sheet with Mortgage Backed Securities which are Guaranteed by the Federal Government who would need a loan from the Fed if it actually had to exercise that guarantee.
    15 Oct 2012, 03:51 PM Reply Like
  • dieuwer
    , contributor
    Comments (2269) | Send Message
     
    Sounds almost like a Ponzi scheme to me...
    15 Oct 2012, 04:03 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2499) | Send Message
     
    I dont think the Fed is in the market to lie about which bonds they are buying, especially considering that part of their strategy is trying to be more transparent about rate decisions. Plus mortgage rates are down, so there must be new money moving into the space. From Barron's:

     

    "Looking instead at mortgage rates, the average 30-year fixed-rate mortgage, which stood at 3.55% immediately pre-QE3, has since fallen to an all-time low 3.36% before ratcheting up a bit to 3.39% last week, according to Freddie Mac's weekly survey numbers."
    15 Oct 2012, 04:48 PM Reply Like
  • John P Ward Jr
    , contributor
    Comments (30) | Send Message
     
    AlbyVA,

     

    I agree that the scale of the numbers is hard to fathom but see this link below........Feds MBS purchase program fm jan '09 thru mar '10 (15 months) was $1.25 trillion or an average of $83bn per month..........as for the fed sourcing the dollars to pay for the purchases, yes, they either issue more treasury bonds (likely to foreign buyers) to raise that capital or they simply print more dollars; not clear which they're doing for this current purchase program.........

     

    http://bit.ly/QJJYEp
    15 Oct 2012, 04:24 PM Reply Like
  • Glueman
    , contributor
    Comments (14) | Send Message
     
    Why can't you people get your act together? All I've read for the past week about AGNC is "sell, sell sell." When the morning market seemed to back up that advice, I sold. NOW, you come out with this.
    DO ANY OF YOU PEOPLE AT S.A. KNOW WHAT YOU ARE DOING??

     

    I subscribed to this service because I wanted some knowledgeable market advice, but it appears that Seeking Alpha doesn't seem to know any more about the market than I do.

     

    I'd do as well be flipping a coin as reading your advice when it comes to making a decision on buy, hold or sell.
    15 Oct 2012, 05:06 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2499) | Send Message
     
    This is not an article claiming to provide investment advice, it is a news story explaining that an analyst at an investment bank upgraded the shares. As for the articles, they are written by contributors to Seeking Alpha, not employees. This isnt an investment bank, or advisory service. Its a place for people to discuss ideas.
    15 Oct 2012, 05:57 PM Reply Like
  • Dividends#1
    , contributor
    Comments (2417) | Send Message
     
    Glueman,

     

    SA is the best site I have ever seen for teaching me about my stocks. That doesn't mean everyone KNOWS what they are doing, it means I have to figure out who does and learn from them and then do more homework and then ACT or DONT ACT. Glueman, try to ask questions to the authors and read the pros and cons and then make up your mind and don't look back.

     

    There were 2 articles last week with opposite views, one said SELL one said HOLD.

     

    I have owned AGNC for over a year. I read every comment about AGNC last week and made many comments myself. There were many people, including me who DECIDED NOT to SELL.

     

    It is MY job to read as much as I can here at SA and determine who makes the most sense to me. I am not an mReit expert, but I trust my investing decisions, based on my track record.

     

    All this news says is AGNC was upgraded, last week it was downgraded by a couple of analysts, I COULD CARE LESS ABOUT UPGRADES AND DOWNGRADES, they are meaningless in the long run.

     

    If, you have not done well in the stock market, change what you are doing. Read the DGI on SA, they are sharp and make a lot of sense.

     

    In my opinion, the only way to make money in the stock market is to buy great dividend stocks and reinvest the dividends. If, you TRADE you will LOSE, if you try to TIME the market you will LOSE. If you buy PM and MO tomorrow and have all the dividends reinvested, you have A MUCH HIGHER CHANCE OF MAKING MONEY IN THE NEXT 5 YEARS then FLIPPING A COIN!!!!!! I can guarantee you that.

     

    AGNC is RISKY compared to the rest of my portfolio, but no one is going to scare me into selling. No one ever made a dime panicking.

     

    LONG AND STRONG: MO,PM,RAI,AGNC,SDRL and KMR

     

    I
    15 Oct 2012, 05:58 PM Reply Like
  • richbar
    , contributor
    Comments (747) | Send Message
     
    What do you want Glueman, unilateral advice that always tells you what decision to make?
    16 Oct 2012, 10:56 AM Reply Like
  • 1GREENGIANT
    , contributor
    Comments (4) | Send Message
     
    The Fed is in our business. The storm is still going. We must wait for the dust to settle. Maybe 4 months
    15 Oct 2012, 05:19 PM Reply Like
  • Tomporter
    , contributor
    Comments (7) | Send Message
     
    I just sold my position. "Nuts"
    15 Oct 2012, 05:29 PM Reply Like
  • rooksmith
    , contributor
    Comments (87) | Send Message
     
    That -8% freefall was as scary as Felix Baumgartner's jump from inner space. Notice the volume, and the price symmetry on the 1 day chart? That looks like high-speed trading run amok - and to top it off an upgrade right after the mini-flash crash. How many people got stopped out on that dip?
    15 Oct 2012, 06:01 PM Reply Like
  • piggysun
    , contributor
    Comments (121) | Send Message
     
    high frequent traders are robing those who set protections. I was scared this morning, then decided to buy some dips to average down my shares.
    15 Oct 2012, 08:47 PM Reply Like
  • antiqueron
    , contributor
    Comments (84) | Send Message
     
    Its nerve racking when you have 1.1 million in agnc and you wake up to a $145,000 loss. They did not shake me out this time. I think analysts play us like yo yos . I made $90,000 from buy and sell before xdiv date last quarter. I am still playing with their money. but man it makes it hard. had to go golf so i did not watch it all day...I will see what the earnings are like end of month and decide then to sell or not. If Obama gets elected all bets are off and I'm moving to Panama
    15 Oct 2012, 07:27 PM Reply Like
  • Dividends#1
    , contributor
    Comments (2417) | Send Message
     
    1.1 million in AGNC. What % of AGNC is in your portfolio? It is not the $ amount that matters, it is the %. If AGNC is your entire portfolio, you are on a dangerous path. AGNC was down 9% at its bottom today, so your figures must be including other stocks that dropped today.

     

    If you have 5 or 10 million in the market, why are you nervous?

     

    I have 15.6% of my portfolio in AGNC and I did not get nervous today.

     

    If you are trading, I hope you realize the odds are against you. 95% of traders lose.

     

    Obama reelection will actually help the market more then a republican win based on past history.
    15 Oct 2012, 07:46 PM Reply Like
  • piggysun
    , contributor
    Comments (121) | Send Message
     
    I think there will be a selloff no matter who get elected. I don't like Romney, --- a liar, changing mind all the time without any honesty
    15 Oct 2012, 08:50 PM Reply Like
  • ertz2@cox.net
    , contributor
    Comments (4) | Send Message
     
    There is not one HONEST politician in the White House, how do you think they got there. When they seek office they will tell you anything to get into office, the best saleman wins....
    16 Oct 2012, 04:06 AM Reply Like
  • ertz2@cox.net
    , contributor
    Comments (4) | Send Message
     
    look on the other side of the table, they all lie
    16 Oct 2012, 04:07 AM Reply Like
  • richbar
    , contributor
    Comments (747) | Send Message
     
    Don't panic. AGNC just corrected to a more modest premium above book. It was risky at the 19% premium but now at 7% is more reasonably priced. There was support at close to book. That floor will continue to rise with time. Consider covered call strategies to hedge against further downside.
    16 Oct 2012, 11:01 AM Reply Like
  • croatkid1
    , contributor
    Comments (192) | Send Message
     
    Should any of us trust our government for anything??

     

    Have they proven that they can run any agency or department ?
    the only thing they have been good at is winning a major war when the populace was behind them and have the troops had been drafted into the various services. they couldn't win in Korea nor in Vietnam, etc.

     

    Vote to throw all the bums out - and I don't mean the Dodgers.

     

    On the other hand, I may just get back in next week - anyone like any other company other than AGNC??
    15 Oct 2012, 09:16 PM Reply Like
  • ubobby
    , contributor
    Comments (2) | Send Message
     
    I hate this stock!
    15 Oct 2012, 09:40 PM Reply Like
  • vic@mixednutsinc.com
    , contributor
    Comments (21) | Send Message
     
    i feel like it is almost impossible to make money in the stock market.
    it took me 10 months to make 100k and it took less than 2 weeks to lose 60k. of it. this is NUTS!!!
    i wish there was a way to protect gains. and I'm not talking placing stop losses. I have done that and it backed fired on me...
    is there a way to hedge against mREITS??
    15 Oct 2012, 09:50 PM Reply Like
  • AlbyVA
    , contributor
    Comments (567) | Send Message
     
    Gains can be protected by selling. But the truth of the matter is that folks need to make LONG TERM investment decisions and ignore the short term static. That way you can sleep at night and capitalize on opportunity.

     

    I remember when I held Equinix at $70/sh and sold out of fear. Now look at the price.
    16 Oct 2012, 12:36 AM Reply Like
  • richbar
    , contributor
    Comments (747) | Send Message
     
    Use covered calls.
    16 Oct 2012, 11:03 AM Reply Like
  • AlbyVA
    , contributor
    Comments (567) | Send Message
     
    Treasury rates are pretty much flat and mortgage rates are pretty much flat. Over the last 3/months the 30yr Fixed rate has hovered between 3.6% to 3.4%. A whole 20/basis point change. The 15yr Fixed fell from 3.00% to 2.80%.

     

    In all honesty, a 20/basis point move in mortgage rates isn't going to kill any MREIT. Also this article says that consumers might not see lower refi rates, which is good news for MREITS.

     

    http://wapo.st/V3J77M
    16 Oct 2012, 12:45 AM Reply Like
  • MagicMarker
    , contributor
    Comments (9) | Send Message
     
    To: Glueman:
    SA is a great site that gives different opinions about various stocks. AGNC is one stock that has a lot of weekly articles giving opinions on its future based on different scenarios. I have owned AGNC for less than a year and bought it for its dividend and its fundamentals as learned from this site. Due to my unique habits , I sold my total position last week, when several articles I read here were slightly negative. Some were positive. they all reinforced my opinion, but didn't tell me what to do.
    It was a good move as it turned out, and I will get back into this stock when it hits near my new lower target, which will take in this QE3 buy back scare.
    If you need an investment advisor for your portfolio, you'll have to pay for one. SA is just a bunch of educated opinions to give you another viewpoint on the market.

     

    Dividends#1 said it very well.

     

    And good luck investing.
    16 Oct 2012, 01:12 AM Reply Like
  • MexCom
    , contributor
    Comments (3051) | Send Message
     
    Crystal clear situation. The spreads are narrowing and the premium to net assets values are too high with continued declines in payout in prospect. I don't see anything positive going forward for this sector.

     

    I am out. Sold all.

     

    Why do I post? I feel that there is a bias from those who are positive in their commentary. My bias is to inform my fellow investors that hey - there is a problem here. The better informed investor makes better investment decisions and it adds to a better market for all.
    16 Oct 2012, 05:58 AM Reply Like
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