Aug. 23, 2013, 11:43 AM
- CYS Investments (CYS +7.1%) leads the mortgage REITs (REM +2.5%) higher a day after its CEO Kevin Grant purchased 34K+ shares of company stock. Grant last purchased shares during the month of May (at far higher prices).
- It's been a busy season of insider buys at the beaten-down mREITs. Of note are a number of purchases at Annaly (NLY +3.2%).
- Among other movers today: American Capital (AGNC +4.1%), (MTGE +2.7%), Invesco (IVR +3.6%), New York Mortgage (NYMT +2.5%), Anworth (ANH +1.8%), Capstead (CMO +2.4%) (see new SA contributor MobilePreacher's take: Capstead, The 'Perfect' Security).
- Related ETFs: (MORT +0.2%), (MORL +5%).
Aug. 20, 2013, 10:50 AM
- Sector giants Annaly (NLY +3.3%) and American Capital Agency (AGNC +4.3%) are the leading gainers, followed but Armour (ARR +2.6%), MFA (MFA +2.7%), Dynex (DX +2.8%), New York Mortgage (NYMT +3.3%), and Western Asset (WMC +2.8%) as interest rates take a breather from going up.
- Earlier: This year's Treasury bear market may be the worst one yet.
- Especially ugly trade in the preferreds of many of the agency mortgage REITs have some traders wondering if retail panic isn't ringing a bell for a bottom in the sector. Today, the action isn't necessarily ugly, but it is sloppy - with different preferreds of the same issuer (Armour, for example I, II) trading in different directions even as both represent the same credit risk.
- ETFs: (REM +2.4%), (MORT +2.7%), (MORL +5.8%).
Aug. 19, 2013, 3:09 PM
- A solid selloff in mortgage REITs (REM -3.7%) turns into a rout as the 10-year Treasury yield takes out another 2-year high at 2.89%. Looking at the short end, September 2015 Eurodollar futures at 98.65 are pricing in more than 100 bps of rate hikes between now and then.
- American Capital (AGNC -5.8%), Armour (ARR -7.5%), Apollo (AMTG -4.9%), Ellington (EARN -4.8%), Anworth (ANH -5.5%), Western Asset (WMC -5.7%), Arlington Asset (AI -4.7%), Dynex (DX -5.1%), Newcastle (NCT -2.3%).
- Mentioned before as starting to look very cheap, Annaly (NLY -4.9%) losses deepen with the stock at $10.72 - its lowest price since 2001 (the dividend fell to $0.25 at the end of 2000 before rising to $0.68 by the start of 2002).
- Tumbling income funds include (KFN -2%), and (PTY -2.1%).
- Among equity REITs, Realty Income (O -1.8%), Medical Properties (MPW -2.4%), and Simon Property Group (SPG -1%) lead down, but HCP (HCP +0.6%) remains green.
Aug. 16, 2013, 1:24 PM
- It's thin trading conditions, but the 10-year Treasury yield jumps 9 bps all of a sudden to 2.86%, touching a new 2-plus-year high. This despite weaker-than-expected consumer and housing data this morning.
- TLT -0.8%, TBT +1.7%.
- The move is taking a toll on stocks, where the S&P (SPY -0.4%) has slipped more than half a percent off the session high.
- The mortgage REITs (REM -1.7%), (MORT -1.5%), (MORL -3.5%) quickly react to the downside. Leading are: Armour (ARR -2.9%), CYS (CYS -4.2%), Javelin (JMI -3.5%), Hatteras (HTS -2.3%), (MFA -2.6%), Annaly (NLY -1.9%), American Capital (AGNC -1.8%), Dynex (DX -1.4%).
Aug. 13, 2013, 12:44 PM
- Tumbling Treasury prices - with TLT carving out a new 52-week low today - are again hitting income favorites.
- Leading mREITs (REM -1.4%) lower are Invesco (IVR -3.3%), Annaly (NLY -2.3%), American Capital (AGNC -2%), and Western Asset (WMC -1.6%).
- A number of income CEFs not long ago were so much in favor they commanded large premiums to NAV. They're now at seemingly growing-by-the-day discounts. Among the movers today is the Pimco Dynamic Income Fund (PDI -1.4%) selling for $27.45 against yesterday's closing NAV of $30.23. Others include: PCI, PFN, and PFL.
- Still trading at premiums to NAV are the Pimco High Income Fund (PHK -0.9%) and the Pimco Corporate & Income Fund (PTY -1.1%).
- Municipals (MUB -0.6%) slip as well, hitting Muni CEFs: NXZ -0.9%, IIM -1.2%, VKQ -0.7%.
- Related ETFs: MORT, MORL, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY .
Jul. 31, 2013, 10:23 AM
- The good vibes from American Capital Agency (AGNC -2.7%) and American Capital Mortgage (MTGE -1.4%) earnings are somewhat snuffed out by rising Treasury yields which have returned to about their highs of early July following strong ADP and GDP prints this morning.
- The 10-year Treasury yield is up 7 bps to 2.69%.
- Both AGNC and MTGE rallied along with the rest of the mREIT sector (REM -1.5%) on smaller-than-expected Q2 book value declines, but rising bond yields could lead to further drops in Q3 (though Gary Kain made the case for his portfolios being well-hedged).
- Annaly (NLY -1.7%) - reports tonight, Armour (ARR -1.4%), Invesco (IVR -2.3%) - reports tomorrow morning, Two Harbors (TWO -1.9%), MFA Financial (MFA -3%), Capstead (CMO -2.2%), CYS Investments (CYS -2.4%), Hatteras (HTS -1.7%).
- MTGE earnings last night.
Jul. 30, 2013, 5:14 PM
- American Capital (ACAS) book value per share of $19.28 vs. $19.04 at Q1's end, $16.62 a year ago. Current share price of $13.48 a 30% discount.
- $0.07 net earnings/share, down $0.64 from a year ago thanks to poor performance (leading to reduced management fees) at American Capital Agency (AGNC) and American Capital Mortgage (MTGE).
- 1.5% annualized ROE.
- 9.1M shares repurchased at average of $13.77 each, accretive to book value by $0.17/share.
- Earnings call tomorrow at 11 ET. (PR).
- Earlier: Earnings report.
Jul. 30, 2013, 12:10 PM
- About the best thing to be said of American Capital Agency's (AGNC +6%) Q is "better than feared," says KBW (which has the stock a Buy with $27 PT). An 11.8% decline in book value beat market expectations, but was worse than KBW's models predicted. While still positive on the stock, the team sees the valuation being stuck at less than 90% of book until rate volatility subsides and the dividend outlook clears.
- Sterne Agree retains its Hold and $22 PT, also saying book value missed what its model suggested. "With the shares at about 86% of book value, we suspect most of this is already discounted."
- Fellow mortgage REIT giant Annaly (NLY) is set to report on Thursday.
Jul. 30, 2013, 9:09 AM
- The pummeling in the mortgage REIT (REM) sector is an overreaction to the move in interest rates, says American Capital Agency (AGNC) CIO Gary Kain on the earnings call (presentation slides)
- If investors just looked at historically low valuations (as compared to book value) without knowing the events of the past quarter, they would probably be eager buyers; especially with the wider spreads of today
- Kain is nevertheless respectful of today's higher volatility, taking the book to over 40% of 15-year mortgages with pay-up risk no longer material; the duration gap remains under one year even with a 200 bp increase in interest rates
- Shares +5.5% premarket
- Previous on AGNC earnings
- Kain-led MTGE +4.2%
- Other mREITs premarket: NLY +1.3%, ARR +1.6%, WMC +2.4%, IVR +1.8%
Jul. 30, 2013, 7:39 AM
- American Capital Agency (AGNC) +4.4% premarket after book value fell just 11.8% in Q2 to $25.51 (with the stock yesterday closing at a 14.3% discount)
- Despite a near-calamitous couple of quarters, the company reports access to funding was uninterrupted and the average "haircut" on repo borrowings was unchanged
- Funding costs of 1.43% vs. 1.28% in Q1 due to entering into longer-dated swaps
- Falling book value required portfolio size to be cut to maintain leverage level
- $91.7B investment portfolio vs. $103.6B in Q1; leverage still increases to 8.5x from 8.1x
- Conference call set for 8:30 ET
Jul. 29, 2013, 5:30 PM
Jul. 29, 2013, 4:50 PM
- Q2 reported "comprehensive loss" for American Capital Agency (AGNC) of $2.37 includes $4.61/ share of net income and $6.98 in losses on M2M investments.
- Book value of $25.51.Tip of the hat to SA contributor Scott Kennedy who predicted book value would come in at $25.40.
- "Q2 was characterized by extreme volatility in both interest rates and mortgage spreads," CIO Gary Kain says, adding that thanks to adjustments to the asset mix and an increase in hedge duration, AGNC's "exposure to higher rates is lower than it has been in years." Shares +5.72% AH. (PR)
Jul. 29, 2013, 4:16 PM| 11 Comments
Jul. 29, 2013, 12:10 AM
Jul. 28, 2013, 5:35 PM
Jul. 24, 2013, 10:21 AMA "disorderly selloff" in hybrid ARMs into the quarter's end nailed Hatteras Financial's (HTS -9.4%) book value, says management on the CC (presentation), noting the presence of a large seller entering the market. Kudos to SA Pro author REIT Analyst who saw the blowup coming and on Monday suggested pairing a short in HTS (and maybe CMO) with a long in AGNC. Looking at today's action, REIT Analyst scratches his head that AGNC is off 3.6%: "Market blindness creates opportunities, but it is annoying." | 18 Comments
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