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Jun. 8, 2015, 4:22 PM
- CYS Investments (NYSE:CYS) declares $0.28/share quarterly dividend, -6.7% decrease from prior dividend of $0.30.
- Forward yield 13.01%
- Payable July 15; for shareholders of record June 22; ex-div June 18.
Jun. 5, 2015, 3:57 PM
- The 10-year yield is up nine basis points to 2.40% and a September rate hike looks to be in play after the BLS reported a job gain of 280K in May and Y/Y wage growth of 2.3%.
- Annaly Capital (NLY -1.2%), American Capital Agency (AGNC -2.3%), Armour Residential (ARR -2.7%), Two Harbors (TWO -2.4%), CYS Investments (CYS -1.4%), Hatteras (HTS -1.5%), New York Mortgage (NYMT -1.2%), Capstead Mortgage (CMO -1.4%), MFA Financial (MFA -1.6%), Anworth (ANH -1.8%), Dynex (DX -1.2%).
- ETFs: MORL, REM, MORT, LMBS
- Previously: Financials on the move as rate hike draws nearer (June 5)
- Previously: Jobs up 280K in May; UE rate ticks higher (June 5)
May 19, 2015, 9:57 AM
- "We get paid for total shareholder return," says CYS Investments (CYS -0.1%) CEO Kevin Grant, presenting at a Wells Fargo conference. Asked what differentiates his REIT from others, Grant says management is not paid on assets under management, but on the returns it delivers.
- Thus, the team happily sold expensive assets in Q1 and bought back stock selling at a steep discount to book value with the proceeds.
- Presentation slides
- As for a return to strong economic growth and a long series of Fed rate hikes, color Grant as (still) skeptical. He reminds that Fed economic and inflation forecasts have consistently been too optimistic throughout the recovery. Grant also takes note of the increasingly dovish tilt of FOMC voters.
May 5, 2015, 10:31 AM
- A big move higher in interest rates continues, with the 10-year Treasury yield up another six basis points to 2.20% - roughly the level at which it started the year (it fell as low as 1.65% in early February).
- The move here is small-time compared to what's going on across the pond, as the absurd levels of two weeks ago become somewhat less absurd. Ten-year Bund yields are up to 0.51% from 0.05%. Italian 10-years are up 30 bps today to 1.78%, with a similar move in Spain.
- The IYR is down 1.1%.
- Individual names: Realty Income (O -1.3%), Senior Housing Properties (SNH -1.5%), Medical Properties Trust (MPW -2.4%), Gramercy Property Trust (GPT -1.8%), Equity Residential (EQR -1.4%), AvalonBay (AVB -1.5%), Government Properties (GOV -2.3%), Pebblebrook Hotel (PEB -2%), Eastgroup Properties (EGP -1.6%), American Campus (ACC -1.4%).
- Mortgage REITS (REM -0.6%) are outperforming the equity names: Annaly (NLY -0.7%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -0.7%), CYS Investments (CYS -0.3%), Invesco (IVR -0.2%).
Apr. 23, 2015, 3:27 PM
- "The math was crystal clear," says CYS Investments (CYS +0.1%) CEO Kevin Grant, speaking on the earnings call (transcript) about the company's 4.1M of share purchases during Q1. "The entire sector was a better investment than the underlying assets," thanks to the sizable stock price discounts to NAV.
- "This was clearly accretive in all the many measures we use to make the decision and we run those calculations every day the trading window is open." The average purchase price was $8.95 each, but Grant notes the company made the buys before the $0.30 dividend, making the move even more accretive.
- Grant called long-term rates just right last year, so what's his outlook now? More of the same - very sluggish global growth, scant wage gains, low or no inflation, low trading volumes in bond markets, and fairly stable long-term interest rates.
- Previously: CYS Investments income slips a bit in Q1, but dividend paid for and book value edges higher (April 22)
Apr. 22, 2015, 4:18 PM
- CYS Investments (NYSE:CYS): Q1 EPS of $0.30 misses by $0.01.
- Net interest income of $43.74M (-8.5% Q/Q)
Apr. 22, 2015, 4:15 PM
- Q1 core earnings plus drop income of $46.9M or $0.30 per share vs. $50.1M and $0.31 in Q4. Dividend is $0.30.
- Book value per share of $10.53 after payment of dividend, up from $10.50 at the end of Q4. Today's close of $9.09 is a 13.7% discount to book.
- Interest rate spread of 1.44% down 11 basis points. CPR of 10.3% up from 8.7%.
- Leverage of 6.77:1 vs. 6.44:1.
- Repurchased 4.15M shares during quarter at a weighted-average price of $8.95 each for a total of $37.2M.
- "While higher Fed Funds Rates could reduce the Company's earnings power, global economic conditions make it difficult to predict when and by how much the Fed will raise rates."
- Conference call tomorrow at 9 ET
- CYS -0.1% after hours
Apr. 21, 2015, 5:35 PM| Apr. 21, 2015, 5:35 PM | 6 Comments
Mar. 18, 2015, 2:30 PM
- Worries about a sharply flatter yield curve abate just a bit as the FOMC drops "patient" from its policy statement - putting rate hikes on the table at subsequent meetings - but Fed economic projections send a dovish signal, with outlooks for economic growth, inflation, and the pace of rate hikes all cut from previous estimates.
- Outperforming the averages: Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.5%), Two Harbors (TWO +1.5%), CYS Investments (CYS +2%), Invesco (IVR +1.7%), Hatteras (HTS +1.7%), Capstead (CMO +2.1%), MFA Financial (MFA +1.7%), Anworth (ANH +2.2%), Dynex (DX +1.5%), Five Oaks (OAKS +3.3%).
- ETFs: REM, MORT, MORL
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
Mar. 9, 2015, 4:16 PM
- CYS Investments (NYSE:CYS) declares $0.30/share quarterly dividend, in line with previous.
- Forward yield 13.7%
- Payable April 15; for shareholders of record March 23; ex-div March 19.
Mar. 6, 2015, 10:21 AM
- The 10-year Treasury yield has popped all the way to 2.24% (up 11 bps on the session) following the strong jobs report which saw 295K jobs added in February and the unemployment rate dropping to 5.5%.
- Checking short-term interest rate futures, they're falling (meaning higher rates), but still not pricing in a rate hike until late summer.
- Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -1%), Armour (ARR -0.9%), Invesco (IVR -0.9%), CYS Investments (CYS -1.4%), Hatteras (HTS -1.1%), MFA Financial (MFA -1.1%), Western Asset (WMC -0.7%), Dynex (DX -1.2%), AG Mortgage (MITT -1.5%), Ellington Residential (EARN -1.1%).
- ETFs: REM, MORT, MORL
- Previously: Dollar and Treasury yields spike after strong jobs print (March 6)
Feb. 12, 2015, 12:03 PM
- CYS Investments (CYS +1.7%) was notable last year for its belief that long-term interest rates weren't heading higher, and its move to take a sizable long position in long-dated Treasury paper. Adding together dividends and the gain in book value in 2014, CYS posted a ROE of 27%, including 6.51% in Q4 (reported last night).
- Speaking on the earnings call (transcript), CEO Kevin Grant notes 10-year U.S. Treasurys continue to look cheap compared to European and Japanese paper.
- Management, however, is working under the assumption that the Fed is "really desperate to get out of ZIRP," and cautions investors to expect thinner spreads and maybe a smaller dividend going forward. On the other hand, Fed tightening could cause bond market disruptions, and CYS has ample dry powder ready to get put to work.
- Previously: CYS Investments income and book value grow in Q4 (Feb. 11)
Feb. 11, 2015, 4:15 PM
- CYS Investments (NYSE:CYS): Q4 EPS of $0.31
Feb. 11, 2015, 4:11 PM
- Q4 core earnings plus drop income of $50.1M or $0.31 per share vs. $49.7M and $0.31 on Q3. Dividend is $0.30.
- Book value per share of $10.50 vs. $10.14 at the end of Q4. Today's close of $8.63 is a 17.8% discount to book.
- Total stockholder return, as defined by the change in book value plus the dividend, of 6.51% for the quarter, 27.06% for the year.
- Net interest rate spread of 1.55% down five basis points from Q3. CPR rate of 8.7% down 60 basis points.
- Leverage of 6.44:1 vs. 6.63:1 in Q3.
- Management says the Fed's pursuit of higher rates is sure to hurt interest margins, but it does have hedges in place to mitigate some of this.
- Conference call tomorrow at 9 ET
- CYS flat after hours
Feb. 10, 2015, 5:35 PM
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Feb. 3, 2015, 3:52 PM
- Unable to put any sort of positive move together even as interest rates tumbled this year, mREITs (REM +0.9%) are uniformly higher this session as the 10-year yield jumps 11 basis points to 1.78%.
- American Capital Agency (AGNC +1.3%) reported better-than-hoped Q4 results last night, but has altered its mix of portfolio holdings and hedges to brace for what it expects will be a wave of prepayments. If rates keep this up, those prepayments may not materialize.
- Annaly (NLY +1.1%), Chimera (CIM +1.5%), CYS Investments (CYS +1.3%), American Capital Mortgage (MTGE +1.8%), Hatteras (HTS +1.1%), MFA Financial (MFA +1.3%), Western Asset (WMC +1.8%), Dynex (DX +1.1%), Ellington Financial (EFC +1.2%).
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