Taking a bow for his mid-March call laying out American Capital Agency's (AGNC) quarter 6 weeks...


Taking a bow for his mid-March call laying out American Capital Agency's (AGNC) quarter 6 weeks ahead of the earnings release, SA Pro's Dane Bowler - in as lucid an explanation (embargoed until Monday afternoon) of agency REITs as you're likely to find - says a cut in the annual dividend to the sustainable level of $3.50/share (30% below current) and a stock price of $25.50 would turn him bullish again.

Comments (7)
  • maxcrc
    , contributor
    Comments (142) | Send Message
     
    Nice try, shortie. If next quarter will be better, we will forget the bad results of the Q1. Book value is still just below $29 and with this dividend rate, it's normal to have it traded at a small premium.
    Would you like to cover your shorts at $25, wouldn 't you ?
    I ' m afraid you should correct your target to $30 and pray to be lucky with that.
    5 May 2013, 01:47 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4206) | Send Message
     
    I think that "sustainable level" is a joke - REITs have to pay out 90%. I bought some on the dip - happy I got in that cheap getting lucky for once.
    5 May 2013, 02:17 PM Reply Like
  • William Packer
    , contributor
    Comments (1012) | Send Message
     
    Too funny. Drop + core was 1.09. They have to pay that out at the least. I am not long or short but think that is a pretty stupid call... It wasn't hard to know agnc would have a bad quarter from a mark to market basis... Simply view agency mbs trading prices.
    5 May 2013, 02:35 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2860) | Send Message
     
    Net spread (including dollar rolls) was $1.18 in each of the last 2 quarters. I would think the dividend level should be sustainable, as long as there is a slight increase in the income over the next several months, which is very possible, as Mr. Kain & company have been very adept at evolving to the interest rate changes.

     

    Either way, the article should be an interesting read for sure.
    5 May 2013, 02:47 PM Reply Like
  • Dumb Aussie
    , contributor
    Comments (12) | Send Message
     
    At 3.50 the dividend is still worth a 11% yield to my fund, not including any unrealised gains on options...
    5 May 2013, 08:32 PM Reply Like
  • kewl1
    , contributor
    Comments (17) | Send Message
     
    Taking everything into account AGNC is still undervaulued. It has a real value of $35+and is rated a hold. This is a bump in the road
    5 May 2013, 08:58 PM Reply Like
  • something fishy
    , contributor
    Comment (1) | Send Message
     
    The calls to buy on rfn bbep agnc ??????
    5 May 2013, 09:23 PM Reply Like
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