The iShares FTSE Nareit Mortgage REIT ETF (REM +2.1%) is nicely ahead this session, but sill down more than 3% on the week.
This week, of course, included the expected Fed rate hike, but the unexpectedly hawkish guidance for 2017. The 10-year Treasury yield has surged all the way to 2.60%, and the two-year yield - at 0.6% just five months ago - flew all the way to 1.26%.
Also hurting this week was a big decline in book value in November at AGNC Investment (AGNC +1.7%) - a bellwether of sorts for agency mREITs.
Other movers today: Annaly Capital (NLY +2.8%), Armour (ARR +1.3%), Two Harbors (TWO +2.1%), CYS Investments (CYS +3.7%), Invesco (IVR +3.6%), New York Mortgage (NYMT +3.4%), MFA Financial (MFA +2.1%), Western Asset (WMC +3.2%), Anworth (ANH +2.9%), Dynex (DX +2.6%).
Q3 net income of $20M or $0.18 per share vs. $11.2M and $0.10 in Q2. Dividend is $0.24.
Book value per share of $6.34 down $0.04 from three months earlier. Today's close of $5.77 is a 9% discount to book.
Economic return for the quarter of $0.20, or 12.5% annualized.
Continued portfolio transition to one increasingly focused on multi-family and residential credit assets, with $75.7M of purchases of non-agency MBS backed by distresses loans, and originating $32.4M in multifamily preferred investments, while cutting agency MBS holdings by 9%.
Cutting his 2016-2016 EPS estimates to $0.50, $0.65, and $0.75, respectively, from $0.70, $0.85, and $0.90, respectively, analyst Doug Harter notes continued low visibility into earnings given that estimates rely on realized and unrealized gains.
Q2's EPS of $0.10 was $0.07 below the Street, but $0.09 lower than Harter's estimate. Excluding realized and unrealized gains of $0.07, EPS of $0.03 missed his estimate by $0.04.
He reiterates an Underperform rating with $5.50 price target.
Q2 net income of $11.2M or $0.10 per share vs. $13.7M and $0.13 one year ago. Dividend is $0.24.
Book value per share of $6.38 slips from $6.49 three months earlier. Today's close of $6.48 is a modest premium to book.
Economic return for the quarter of $0.13 per share, or roughly 8% annualized.
Company took continued steps to focus on credit, purchasing $98M of distressed residential securities and $15M of Freddie Mac K Series CMBS, while reducing net capital allocated to agency RMBS by about 11%.
Quiet trading volumes. however, are lengthening the time frame to put capital to work in desired asset classes, hampering earnings.