Sell Arlington Asset Investment Corp.: Dividend Reduction Is Imminent
The Small-Cap Authority • 38 Comments
The Small-Cap Authority • 38 Comments
Thu, Sep. 15, 4:47 PM
Tue, Jul. 26, 6:03 PM
- Q2 non-GAAP core operating income of $0.67 per share vs. $0.80 earned in Q1 $1.31 in Q4 of last year. Dividend of $0.625 per share.
- Book value per share of $18.77 stabilizes somewhat, dipping just $0.09 for the quarter. Close of $13.48 is a 28% discount to book. Tangible book value per share of $13.92 vs. $14.45 three months earlier.
- Positive economic return of 11.3% (annualized) on book value for the quarter.
- Conference call tomorrow at 9 ET
- Previously: Arlington Asset Investment EPS in-line, misses on net interest income (July 26)
- AI flat after hours
Tue, Jul. 26, 5:33 PM
Fri, Jun. 17, 4:51 PM
Thu, Jun. 9, 10:51 AM| Thu, Jun. 9, 10:51 AM | 2 Comments
Tue, May 31, 8:17 AM
Tue, May 10, 8:57 AM
- Q1 non-GAAP core operating income of $18.4M or $0.80 per share vs. $1.31 earned in Q4. Dividend is $0.625.
- Book value per share of $18.86 drops from $21.05 three months earlier. Last night's close of $12.46 is a 34% discount to book. Tangible book value per share of $14.45.
- Economic return - defined as the dividend less the drop in book value divided by the period-beginning book value - was a negative 26% annualized.
- Portfolio and hedges were positioned for higher rates, says the company. When rates fell and spreads widened in Q1, the strategy resulted in a big decline in book value which the company expects to recoup over time.
- Conference call at 11 ET
- Previously: Arlington Asset Investment misses by $0.12 (May 10)
- AI -1.3% in thin premarket action.
Tue, May 10, 8:40 AM
Fri, Apr. 8, 7:22 AM
- Imation Corp. (NYSE:IMN) acting in concert with Clinton Group has notified Arlington Asset Management (NYSE:AI) of its intent to nominate its own slate of board members at the 2016 annual meeting.
- Arlington management notes Imation is an IT data storage and security company which the Clinton Group took control of about one year ago. Together Imation and Clinton own less than 0.1% of AI stock, and it was very recently purchased.
- Arlington also notes what it calls questionable self-dealing by Clinton/Imation since the Clinton Group took control of the board there, not to mention a sharp decline in the stock price.
- Now read: Arlington Asset Investment Corporation: Why Shares Keep Falling
Tue, Mar. 15, 5:12 PM
- Arlington Asset Investment (NYSE:AI) declares $0.625/share quarterly dividend, in line with previous.
- Forward yield 19.39%
- Payable April 29; for shareholders of record March 31; ex-div March 29.
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%)
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%
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.
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)
Tue, Feb. 2, 5:56 PM
- Non-GAAP core operating income of $1.31 per share or $1.35 excluding loss on private-label MBS. Q3 core operating income was $1.35. Dividend is $0.625.
- Year-end book value per share of $21.05 up from $20.75 at the end of Q3. Today's close of $10.81 is nearly a 50% discount to book.
- $600K spent on buybacks during quarter.
- Company fully repaid outstanding FHLB advances subsequent to year-end.
- Conference call tomorrow at 9 ET
- Previously: Arlington Asset Investment beats by $0.03, misses on net interest income (Feb. 2)
- AI flat premarket
Tue, Feb. 2, 5:24 PM
- Arlington Asset Investment (NYSE:AI): Q4 EPS of $1.35 beats by $0.03.
- Net interest income of $32.94M (+0.2% Y/Y) misses by $0.72M.