Arlington Asset Investment Corporation (AI) - NYSE
  • Fri, Feb. 26, 10:07 AM
    • The mREITs (REM +1.3%) are higher across the board after Apollo Residential Mortgage (AMTG +31.3%) agrees to a sale at a hefty premium to last night's close, but still at a discount to book value.
    • The entire sector is trading at sizable discounts to book value, with some names at massive discounts. For its part, Apollo Residential yesterday could be purchased for about 60% of its end-of-year book value. And the assets on the books of these companies tend to be highly liquid and easily valued.
    • Running an mREIT may not be a terribly efficient exercise at the small market caps most of the sector sports. The companies depend on being able to issue stock with which to fund growth, but can't do so (without being wildly dilutive) when the shares are trading at such wide discounts.
    • Sector giants Annaly Capital (NLY +0.6%) and American Capital Agency (AGNC +1.2%) have market caps above $6B, and Two Harbors (TWO +0.8%), Chimera (CIM +1.1%), CYS Investments (CYS +1%), Invesco (IVR +3.5%), Hatteras (HTS +1.2%), MFA Financial (MFA +1%), and Capstead (CMO +1%) are all near or well over $1B.
    • Players in Apollo's league (sub-$500M market cap) include New York Mortgage (NYMT +1%), Western Asset (WMC +0.6%), Anworth (ANH +1.3%), Dynex (DX +1.4%), Arlington Asset (AI +4.6%), AG Mortgage (MITT +8.7%), The Ellingtons (EFC +1.9%), (EARN +1.1%), Javelin (JMI +2.8%), Orchid Island (ORC +1.5%), Five Oaks (OAKS +0.7%), ZAIS Financial (ZFC +1.3%)
    | Fri, Feb. 26, 10:07 AM | 32 Comments
  • Wed, Feb. 24, 11:30 AM
    • Yes the stock is trading at a whopping discount to book value, says analyst Lucy Webster, but book value is going to see pressure from costs associated with the hedge portfolio and the need for the company to roll forward U.S. Treasury derivative contracts by the end of the quarter.
    • In addition, Webster and team think the non-agency MBS market has plateaued. With the company reinvesting capital into the agency portfolio, returns will be more muted, and the current dividend may not be covered by Q4.
    • She downgrades to Neutral from Buy, with $13 price target (vs. $11.15 current price). That $13 PT is 0.9x the team's estimate of tangible book value per share of $14.07. Year-end BVPS was $16.81, but Nomura has adjusted for fair-value movements thus far in 2016.
    • AI -5.7%
    | Wed, Feb. 24, 11:30 AM | 3 Comments
  • Thu, Feb. 4, 11:00 AM
    • It doesn't take a lot of good news to light a fire under the price of beaten-down stocks, and sometimes just the absence of bad news is enough.
    • Arlington Asset Investment (NYSE:AI) after the close on Tuesday reported its first quarterly increase in book value in more than a year. With the stock trading at a near-50% discount to book, the path's been higher since.
    • Earnings call transcript
    • Today, the stock notches an upgrade to Buy at Ladenburg Thalman.
    • AI is up 3% this session and nearly 15% over two days.
    | Thu, Feb. 4, 11:00 AM | 2 Comments
  • Wed, Feb. 3, 3:01 PM
    • Today's gains are being led by Arlington Asset (AI +7.3%) (not a REIT, but in the business) after it posted its first quarterly increase in book value in six quarters last night.
    • American Capital Agency (AGNC +1.7%) reported earlier this week, and Nomura's Brock Vandervliet notes three positives from yesterday's earnings call (transcript): 1) More buybacks are coming; 2) Green shoots are apparent in the MBS market; 3) Book value should remain stable from here (it rose a bit in the year's final month, though dipped for the quarter).
    • He does slightly adjust downward his earnings estimates - by a penny in Q1 to $0.54 per share, and by two cents for the full year. He expects the $0.60 dividend is safe through H1, but there is some risk there.
    • Annaly (NLY +0.7%), Two Harbors (TWO +2.9%), CYS (CYS +2.6%), Hatteras (HTS +1.9%), Capstead (CMO +2.2%), Dynex (DX +2.2%)
    • ETFs: MORL, REM, MORT, LMBS
    • Previously: Arlington Asset posts Q4 book value gain (Feb. 2)
    • Previously: American Capital Agency higher post-earnings (Feb. 2)
    | Wed, Feb. 3, 3:01 PM | 22 Comments
  • Wed, Jan. 20, 10:44 AM
    • The discounts to book values across the sector have grown to such high levels that one wonders whether it just makes more sense for many of these players to liquidate the portfolios and return the money to the shareholders.
    • Sector giants Annaly Capital (NLY -4.9%) and American Capital Agency (AGNC -4.6%) are selling at 30% discounts to their most recent book value.
    • Armour Residential (ARR -8.3%), Invesco Mortgage (IVR -7%), Hatteras Financial (HTS -5%), New York Mortgage (NYMT -9.5%), Apollo Residential (AMTG -6.4%), AG Mortgage (MITT -7.2%), Anworth (ANH -6.3%), Arlington Asset (AI -8.7%), and Five Oaks (OAKS -8%) are selling at greater than 40% discounts. Two Harbors (TWO -7.5%), CYS Investments (CYS -6.2%), American Capital Mortgage (MTGE -6%), Capstead (CMO -5.9%), Dynex (DX -7.2%), Western Asset (WMC -8%), Ellington Residential (EARN -7.2%), and Orchid Island (ORC -9.6%) are all nearing 40% discounts.
    • MFA Financial (MFA -6.4%) and Chimera Investment (CIM -8.1%) are both nearing 30% discounts to book.
    • ETFs: MORL, REM, MORT, LMBS
    | Wed, Jan. 20, 10:44 AM | 249 Comments
  • Dec. 16, 2015, 2:24 PM
    • The about left-for-dead mortgage REIT sector (REM +2.4%) has been enjoying a big Fed rate hike day, and has added to gains since the news officially came down at 2 ET.
    • Credit-exposed names are leading the way higher: Chimera Investment (CIM +5.7%), Invesco (IVR +2.4%), New York Mortgage (NYMT +2.1%), Western Asset (WMC +5.6%), Anworth (ANH +2.7%), Arlington Asset (AI +4.7%), AG Mortgage (MITT +4.2%), Orchid Island (ORC +5%). MFA Financial (MFA +3.4%)
    • Others: Annaly (NLY +2.1%), American Capital Agency (AGNC +0.8%), CYS Investments, Capstead (CMO +1.6%)
    • ETFs: MORL, REM, MORT, LMBS
    • Previously: Fed projections: 1.4% Fed Funds by the end of 2016 (Dec. 16)
    • Previously: Fed officially puts an end to ZIRP (Dec. 16)
    | Dec. 16, 2015, 2:24 PM | 35 Comments
  • Dec. 14, 2015, 11:32 AM
    • Before it was fears about interest rates - first, with long yields too low and thus slimming margins, and then the Fed's promise to hike short rates (and slimming margins even more). Now we can toss credit worries into the mix, and the action's plenty panicky there - junk bonds are off sharply again today and two more funds have been forced to gate withdrawals and/or liquidate.
    • Once pure-play agency REITs like Annaly Capital (NLY -2%) and American Capital Mortgage (AGNC -1.7%) now have some credit exposure.
    • Others are more credit-exposed: Chimera Investment (CIM -3.5%), Invesco (IVR -2.7%), American Capital Mortgage (MTGE -2.8%), MFA Financial (MFA -2.8%), New York Mortgage (NYMT -4.7%), Western Asset (WMC -3.6%), Anworth (ANH -2.9%), Arlington Asset (AI -3.6%), Javelin (JMI -4.8%), Orchid Island (ORC -7.4%), Five Oaks (OAKS -12.3%)
    • Just to pick a few out, Annaly Capital sells at a 24.4% discount to Sept. 30 book value; American Capital Agency sells at a 26.3% discount; Invesco at a 30% discount; MFA Fnancial at 15.4% discount; New York Mortgage at a 25% discount (this sold at a premium to book as recently as early fall).
    • ETFs: MORL, REM, MORT, LMBS
    | Dec. 14, 2015, 11:32 AM | 65 Comments
  • Dec. 11, 2015, 3:52 PM
    • The sector often goes green on days when the major averages sell off, but not today, WIth the S&P 500 down 2% and the 10-year Treasury yield lower by 10 basis points to 2.13%, the mREIT sector (REM -2%) is lit up bright red.
    • Sector giants Annaly Capital (NLY -1.6%) and American Capital Agency (AGNC -1.2%) are among the best performers.
    • Armour Residential (ARR -2.1%), Invesco (IVR -3.3%), New York Mortgage (NYMT -1.9%), Western Asset (WMC -3.6%), Apollo Residential (AMTG -4.2%), Dynex (DX -2.8%), Arlington Asset (AI -3.7%), Ellington Residential (EARN -2.9%), Five Oaks (OAKS -6.7%)
    • ETFs: MORL, REM, MORT, LMBS
    | Dec. 11, 2015, 3:52 PM | 41 Comments
  • Oct. 7, 2015, 11:15 AM
    • So roughed up are the mortgage REITS (REM +0.7%), that what's now a six-day rally in the sector is little more than a blip on the longer-term chart.
    • There's no particular news today, but with much of the sector trading at somewhere in the area of a 15-20% or even higher discounts to book value, even the worst scenario on interest rates may be more than priced in.
    • Leading the way higher today are Ellington Residential (EARN +4.3%), Javelin Mortgage (JMI +3.4%), Arlington Asset (though not a REIT) (AI +2.3%), Dynex Capital (DX +0.9%), Apollo Residential (AMTG +1.2%), PennyMac Mortgage (PMT +1%), Cherry Hill Mortgage (CHMI +1.2%), Hatteras Financial (HTS +0.5%), Two Harbors (TWO +0.8%). The action in Annaly Capital (NLY) and American Capital Agency (AGNC -0.3%) is more subdued.
    • ETFs: MORL, REM, MORT, LMBS
    | Oct. 7, 2015, 11:15 AM | 27 Comments
  • Sep. 28, 2015, 12:24 PM
    • It's a big ex-dividend day for the mortgage REIT sector, but the stocks of payers like Ellington Residential (EARN -6.2%), Arlington Asset (AI -10.4%), Western Asset (WMC -4.9%), Two Harbors (TWO -5.7%), Chimera Investment (CIM -7.3%), New York Mortgage (NYMT -6.9%), American Capital Agency (AGNC -3.2%), and Annaly Capital (NLY -4.8%),  are down far more than their payout amounts.
    • The above declines include the dividends being paid, so are higher than actual.
    • Others like Armour Residential (ARR -2.9%), Javelin Mortgage (JMI -4.2%), Five Oaks (OAKS -5.9%), AG Mortgage (MITT -3.4%), and Invesco (IVR -4.2%) are just down.
    • The decline comes as another Fed head all but promises a rate hike this year, and the 10-year Treasury yield falls back six basis points to 2.10%. Thirty-day Fed Fund futures are pricing in just less than a 50% chance of a 25 basis point rate hike in 2015.
    • ETFs: MORL, REM, MORT, LMBS
    | Sep. 28, 2015, 12:24 PM | 77 Comments
  • Sep. 18, 2015, 11:19 AM
    • Annaly Capital (NLY +0.9%), Anworth Mortgage (ANH +0.6%), Apollo Residential (AMTG +0.1%) and ZAIS Financial (ZFC +0.8%) last night added themselves to the smallish list of mortgage REITs maintaining dividends this quarter.
    • Those announcing dividend cuts after the bell were American Capital Mortgage (MTGE -1.2%) and Arlington Asset (AI -0.5%).
    • The sector as a whole continues to move higher following the FOMC yesterday afternoon, but hit particularly hard today is CYS Investment (CYS -3.1%). The move is especially notable as CEO Kevin Grant has been consistently skeptical about fears of higher rates.
    • ETFs: MORL, REM, MORT, LMBS
    | Sep. 18, 2015, 11:19 AM | 31 Comments
  • Aug. 21, 2015, 3:30 PM
    • These income favorites often catch a wave of buying when the major averages sell off and yields fall, but the panicky action today is taking down nearly all equities.
    • The iShares DJ U.S. Real Estate ETF (IYR -1.7%) and the iShares FTSE NAREIT Mortgage REIT ETF (REM -1.6%), however, are outperforming the S&P 500's 2.7% decline.
    • Previously: Just a modest rally for Treasurys as stocks crumble (Aug. 21)
    • Leading the mREITs lower is Javelin Mortgage (JMI -5.9%), with SA contributor ColoradoWealthManagementFund noting the company has stopped buying back stock despite its wide discount to book value. The sector as a whole looks like it will continue to have to deal with widening spreads and rising prepayments, and still have a looming rate hike cycle on the horizon.
    • Armour Residential (ARR -2%), CYS Investments (CYS -1.8%), Annaly (NLY -1.2%), American Capital Agency (AGNC -1.8%), Arlington Asset (AI -2.4%), Orchid Island (ORC -2.5%), Dynex (DX -2%), Capstead Mortgage (CMO -1.3%).
    • Equity REITs: Realty Income (O -0.7%), Vereit (VER -2.3%), Health Care REIT (HCN -1%), HCP (HCP -1.1%), Gramercy Property (GPT -3.1%), Equity Residential (EQY -1.6%), Simon Property (SPG -0.5%), Kimco (KIM -2.1%), Hospitality Properties (HPT -2.8%), Stag Industrial (STAG -1.4%), American Campus (ACC -1.1%), Public Storage (PSA -1%).
    | Aug. 21, 2015, 3:30 PM | 38 Comments
  • Jul. 29, 2015, 9:54 AM
    • Arlington Asset Management (NYSE:AI) reported a rough Q2 on Monday night, but investors used the news to buy the badly beaten-down stock yesterday.
    • Shares have given back those gains today as Ladenburg Thalmann throws in the towel on its Buy rating and downgrades to Neutral.
    • AI is lower by 3.25% in early action, and off about 30% year-to-date.
    • Previously: Arlington Asset discount to book value widens (July 28)
    | Jul. 29, 2015, 9:54 AM | 3 Comments
  • Jul. 24, 2015, 3:01 PM
    • Just a 1% decline in the major averages (which are being helped by some high-profile earnings moves) is masking far greater carnage in a number of other sectors, notably healthcare (XLV -2.5%) and energy (XLE -2%).
    • Business development companies and mortgage REITs are being socked again as well, suggesting the worry may go beyond interest rates and to credit in general, especially as commodity prices continue to tumble - to pick one, crude oil at $48.06 per barrel is at its lowest price in about four months.
    • Among BDCs: Hercules Technology Growth (HTGC -4.2%), Triangle Capital (TCAP -3.3%), PennantPark Investment (PNNT -5.4%), Prospect Capital (PSEC -1.4%), Main Street Capital (MAIN -2.8%), TICC Capital (TICC -2.4%), KCAP Financial (KCAP -2.6%), THL Credit (TCRD -2.7%), FS Investment (FSIC -1.8%).
    • Among mREITs: Armour Residential (ARR -3.1%), Two Harbors (TWO -0.9%), CYS Investments (CYS -2%), Invesco Mortgage (IVR -1.5%), Capstead Mortgage (CMO -1.2%), Apollo Residential (AMTG -2.6%), Arlington Asset (AI -3.7%), American Capital Mortgage (MTGE -0.9%), Orchid Island (ORC -5.8%).
    • MReit ETFs: MORL, REM, MORT, LMBS
    • BDC ETFs: BDCL, BDCS, BIZD, FGB
    | Jul. 24, 2015, 3:01 PM | 82 Comments
  • Jul. 23, 2015, 1:17 PM
    • CYS Investments last night reported a big drop in book value as the effect of sharply higher rates more than offset the company's hedges. Core income failed to cover the dividend as prepayments also rose.
    • The stock today is down 2.6% and trading at more than a 20% discount to book value.
    • Earlier this week, Hatteras also reported a decline in income and fall in book value.
    • Sector giants Annaly Capital (NLY -0.5%) and American Capital Agency (AGNC -0.7%) are performing the best today. Armour Residential (ARR -1.8%), Chimera Investment (CIM -0.8%), Invesco Mortgage (IVR -1.1%), New York Mortgage (NYMT -1.2%), Western Asset Mortgage (WMC -1%), Anworth Mortgage (ANH -1.2%), Arlington Asset (AI -2.3%), Ellington Residential (EARN -2.1%), Dynex Capital (DX -0.8%)
    • ETFs: MORL, REM, MORT, LMBS
    | Jul. 23, 2015, 1:17 PM | 32 Comments
  • Jun. 29, 2015, 11:24 AM
    • The smallest players are being hit hardest today, with Orchid Island Capital (ORC -8.9%), Five Oaks Investment (OAKS -3.4%), and Cherry Hill Mortgage <<CHM>I> leading the sector lower. Arlington Asset (AI -1.3%), Apollo Residential (AMTG -1.2%), and Javelin Mortgage (JMI -0.8%) belong in that group as well.
    • Sector bigwigs Annaly Capital (NLY -0.1%), American Capital Agency (AGNC -0.1%), Two Harbors (TWO -0.2%),and  MFA Financial (MFA -0.3%) are holding up better.
    • Previously: Rates plunge on Greece gets ready to default (June 29)
    • ETFs: MORL, REM, MORT, LMBS
    | Jun. 29, 2015, 11:24 AM | 46 Comments
Company Description
Arlington Asset Investment Corp. is a principal investment firm, which currently acquires and holds primarily mortgage related assets and holds certain other assets. The company's portfolio consists primarily of agency backed mortgage-backed securities and private-label residential... More
Sector: Financial
Industry: Investment Brokerage - Regional
Country: United States