SA Transcripts • Mon, Nov. 10
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Update: Javelin Mortgage Reports Q3 Results - Not Great But Kept Pace With Competitors
- Javelin Mortgage has just reported its third-quarter results and it saw some quarter-over-quarter weakness as a result of the way interest rates moved and didn't cover its dividend.
- I previously opined that Javelin Mortgage would keep pace with its competitors in Q3 and that it would cover its dividend.
- Although the quarter was so-so, it kept pace with competitors, but I am now more neutral on the stock than I was in the past.
Update: Javelin Mortgage Announces Dividends - I Told You Not To Panic
- Javelin Mortgage Investment has just announced its upcoming monthly dividend payments for the next quarter maintaining its $0.15 payout.
- Last week I urged investors not to panic over the sell-off in JMI shares and felt the dividend would be maintained if the quarter was strong.
- The present news strengthens my thesis on the company and shares continue to be on a rare sale now yielding 15.05%.
Stop Panicking Over Javelin Mortgage - It Clearly Just Went On A Rare Sale
- I address concerns from readers regarding Javelin's sell-off this month, some of which may have stemmed from my prior article.
- Shares are down on no news; I detail exactly why shares are on sale.
- If you liked this stock a month ago when shares were trading at a premium to book value, then you have to love shares here, trading at a rare discount.
Javelin Mortgage Should Keep Pace With Its Competitors In Q3... And It Needs To
- Javelin mortgage outperformed my top mREIT holdings and main competitors Annaly and American Capital in recent quarters.
- Javelin underperformed its competitors badly in Q2.
- Javelin's interest rate spread narrowed, earnings declined and book value was stagnant.
- Javelin failed to cover the dividend.
- Recent underperformance may be an anomaly stemming from after effects of its portfolio rebalancing efforts.
Update: Javelin Mortgage Investment's Second Quarter Earnings Impact
- Javelin Mortgage released Q2 earnings and reported core taxable REIT income of $4.9 million of $0.41 per share.
- This is in-line with most expectations, although slightly worse than my prediction for performance for the company I made to start the year.
- Shareholder equity was $161 million or $13.40 per common share, a 1% premium to the current price of $13.27.
- The stock sold off hard following the report, but has since begun to rebound.
- Currently the dividend is safe, but Javelin came in $0.04 per share shy of complete coverage.
Wed, Nov. 5, 10:36 AM
- Javelin Mortgage (JMI -0.5%) had a big run higher late last year as is stepped up the pace of share repurchases to fend off an activist shareholder.
- The strong move, however, left the stock trading at a premium to book value - a rarity in the mREIT sector - and it's struggled this year (-10%) while most of its sector brethren rallied.
- Q3 results earlier this week showed a quarterly decline in book value and the stock - though no longer at a premium - sells (as of the time of the earnings release) at just a 1.9% discount to September 30 book.
- Thalman downgrades to Hold from Buy.
Mon, Nov. 3, 4:40 PM
- Q3 core income of $4.7M or $0.39 per share vs. $4.9M and $0.41 in Q2. Dividend is $0.45.
- Book value per share of $12.85 vs. $13.40 in Q2. Today's close of $12.61 is a 1.9% discount to book.
- Net interest margin of 1.62% down eight basis points from Q2.
- Average CPR on agency holdings of 6.56% rises from 4.77% in Q2.
- Leverage of 7.07:1 down from 7.67:1.
- About $288.6M of agency MBS sold during quarter, bringing agency holdings down to $917.2M from $1.2B. Non-agency holdings of $287.4M vs. $282M in Q2.
- Conference call tomorrow at 9 ET
- Previously: Javelin Mortgage Investment EPS of $0.39
- JMI flat after-hours
Mon, Nov. 3, 4:33 PM
Thu, Oct. 9, 10:40 AM
- It's been a good week for mortgage REITs (REM +0.7%) which rose on Tuesday as the broad market tumbled and brought yields down with it, rose more on Wednesday, this time alongside a major broad market rally on dovish FOMC minutes, and are on the move higher again today as the averages again head south.
- Down to 2.28% earlier in the session (a 16-month low), the 10-year Treasury yield is now flat on the day at 2.32%.
- This week's strong move comes following a tough September in which the mREITs gave back a nice chunk of their YTD gains.
- Annaly (NLY +1.2%) is up nearly 5% over the last four sessions. American Capital Agency (AGNC +1.5%) is ahead more than 6%.
- Others: Armour (ARR +1%), Chimera (CIM +1%), CYS Investments (CYS +1.2%), New York Mortgage (NYMT +1.3%), Anworth (ANH +0.8%), Dynex (DX +1%), Javelin (JMI +1.5%), Five Oaks (OAKS +0.9%).
- Other ETFs: MORT, MORL
Tue, Sep. 30, 3:05 PM
- Many in the sector (REM -0.9%) presented today at the JMP Financial Services and Real Estate Conference. Those heard in full by this reporter - CYS Investments (CYS -1.6%), Hatteras Financial (HTS -0.9%), and MFA Financial (MFA -1.3%) - presented nothing alarming, but the sector is nevertheless lit up bright red.
- Other presenters included Capstead Mortgage (CMO -1.2%), Arlington Asset (AI -2.2%), Dynex Capital (DX -1.7%), Invesco (IVR -1.2%), Armour (ARR -2%), New York Mortgage Trust (NYMT -3.2%), Javelin Mortgage (JMI -1.5%), Five Oaks Investment (OAKS -1.9%), and Apollo Residential (AMTG -1.1%).
- Related ETFs: MORT, MORL
- Previously: CYS's Grant not buying hawkish ideas from Fed
- Previously: Hatteras updates on Q3 at conference
- Previously: MFA Financial positions for further housing improvement
Wed, Sep. 17, 2:51 PM
- Another $10B taper this month brings QE to just $5B monthly, an amount the FOMC expects to go down to zero with its next policy meeting. The "dots" shifted somewhat higher - meaning maybe a slightly earlier start to Fed rate hikes and a higher level of Fed Funds at the end of the next few years, with the median forecast being 2.9% at the end of 2016.
- Mortgage REITs (REM +0.2%) have been under pressure in the sessions ahead of the FOMC, and are mostly snoozing through today's news.
- Annaly (NLY -0.1%), American Capital Agency (AGNC +0.1%), CYS Investments (CYS +0.2%), New York Mortgage Trust (NYMT +0.5%), Dynex (DX +0.8%), Ellington Residential (EARN +1.2%), Javelin (JMI +1.3%).
- Previously: FOMC statement and projections lean hawkish
- Previously: Yellen press conference: Falling UE rate still masking labor market weakness
Tue, Aug. 5, 6:53 AM
- Core income of $4.9M or $0.41 per share vs. $5.7M and $0.48 in Q1. Dividend is $0.45.
- Book value per share of $13.40 vs. $13.38 in Q1. Last night's close of $13.26 is a 1% discount to book.
- Net interest margin of 1.7% slips 34 basis points.
- Average CPR on agency holdings of 4.77% up from 3.13%.
- Leverage of 7.67:1 down from 7.95:1. Portfolio relatively unchanged, with agency holdings of about $1.2B and non-agency of $282M.
- Previously: Javelin Mortgage Investment results
- JMI flat premarket
Mon, Aug. 4, 5:22 PM
Mon, Jul. 7, 8:29 AM
- Both Armour Residential (ARR) and sister-company Javelin Mortgage (JMI) confirm their monthly dividends for Q3, Armour's payout being $0.05 monthly and Javelin's $0.15.
- Armour press release; Javelin press release
- Armour's dividend amounts to an annualized rate of 13.9% and Javelin's to 13%.
- Javelin is now lower by 2.5% premarket after the Citi downgrade.
Mon, Jul. 7, 7:35 AM| Comment!
Wed, Jun. 11, 4:52 PM
- Javelin's (JMI) latest slide deck shows agency mortgage holdings rising to 60.2% of the portfolio in June from 56.4% last month and 51.6% in April. Non-agency holdings have fallen to 39.8%. It's the highest allocation to agency/lowest allocation to non-agency since last October.
- The Constant Prepayment Rate (CPR) on the agency portfolio ticked up to 5% in June from 4.5% in May. 5% is the highest CPR since late last summer.
- The company reports a float of roughly 12M shares, the same as March 31. Prior the start of the buyback program late last year, the float was 13.5M shares. The stock of course, is no longer at a steep discount to book value, closing today at $13.98 vs. March 31 book of $13.38 - putting the shares at a premium of 1.04x book.
Wed, May. 7, 3:50 PM
- Ahead of Annaly Capital (NLY +1.7%) results after the bell, the mortgage REITs (REM +0.8%) are higher across the board, led by the four who reported earnings after yesterday's close. New York Mortgage Trust (NYMT +2.8%), Apollo Residential Mortgage (AMTG +1.3%), AG Mortgage Investment (MITT +3.3%), and Javelin Mortgage (JMI +0.9%).
- Bond yields - mostly at the short end - are slipping amid Janet Yellen's congressional testimony.
- At the current price of $7.59, New York Mortgage Trust is trading at 1.16x March 31 book value, and Javelin Mortgage - which was one of the cheapest in the sector a few months back - is trading right at book following large share buybacks at the behest of activist investor Phil Goldstein. MITT and AMTG continue to trade at sizable discounts to book value.
- Related ETFs: MORT, MORL
Wed, May. 7, 7:23 AM
- Core earnings of $5.7M or $0.48 per share vs $5.9M and $0.45 in Q4. Estimated taxable REIT income of $5.2M or $0.43. Quarterly dividend is $0.45.
- Book value per share of $13.38 down from $14.28 after payment of dividend. Last night's close of $13.23 is $0.15 below book.
- Leverage of 7.95:1 rises from 4.9:1. Agency portfolio valued at about $1.2B, non-agency at $284.6M. At end of Q4, it was $801.8M and $284.3M.
- Net interest margin of 2.04% rises 26 basis points.
- CPR on agency holdings of 3.13% vs. 4%.
- No buybacks this quarter after Phil Goldstein calls off the (Bull)dogs. About 1.5M shares remain in the repurchase authorization. Legal and advisory fees associated with Goldstein's proxy contest of $226K.
- Source: Press Release
- Previously: Javelin Mortgage Investment EPS of $0.48
- JMI -1% premarket
Tue, May. 6, 7:28 PM
Wed, Apr. 9, 2:43 PM
- Mixed earlier, a lot more green creeps into the mortgage REIT sector (REM +0.6%) after the FOMC minutes suggest members aren't in as quite of a rush as thought to hike rates. The 10-year note yield is back to flat on the session at 2.68% (was as high as 2.72% pre-release), and the short end is doing even better (steeper curve) with the Dec. 2015 Eurodollar contract higher by six basis points.
- Leading the move higher are American Capital Agency (AGNC +1.1%), Chimera Investment (CIM +1.1%), and Hatteras Financial (HTS +1%). Also among those ahead are Annaly (NLY +0.7%), Anworth (ANH +0.6%), Ellington (EFC +1.3%), (EARN +0.1%), and Javelin (JMI +0.6%).
- Related ETFs: MORT, MORL
Fri, Mar. 7, 3:45 PM
- Hardest hit in the mREIT sector today is Javelin Mortgage (JMI -5.3%) after reporting core EPS of $0.45, down from $0.54 in Q3, but inline with the current monthly payout of $0.15.
- Book value per share fell to $14.28 from $14.69 at the end of Q3 (if you add the dividend back, it actually rose a few pennies), leaving the stock (before today's decline) trading at a premium to book. Net interest margin of 1.78% gained six basis points with CPR falling to 4% from 5.4%.
- Leverage declines to 4.9:1 from 6.48:1 as the agency portfolio falls to $802M from $1.3B and the non-agency to $284.3M from $267.2M.
- 1.5M shares repurchased at average price of $12.72 each during Q4, leaving about 12M shares outstanding.
- The company previously announced a boost in the buyback authorization to 3M shares.
- Press release
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