ColoradoWealthManagementFund • Tue, Nov. 18
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Update: Anworth Earnings Q3 2014 - The Little Company Delivers In A Big WayColoradoWealthManagementFund • Tue, Nov. 18
- Q3 Core EPS of $.13 beat consensus estimates of $.09. GAAP EPS was $.15.
- Net Interest Income of $17,992 (in thousands) is down 9.7% year over year.
- The diluted weighted average of shares outstanding was 125,192 (in thousands), which is down 14.4% year over year.
- The company slightly outperformed by my expectations on earnings by sticking to the share repurchase plan.
- The company still has some red flags, but management has performed dramatically better over the last six months. I am upgrading my position on the company.
Anworth Mortgage Asset Corporation Q3 Earnings Preview
- The EPS should be fairly weak, around $.08, unless management reduces amortization charges or reduces the notional value of hedges.
- The company has been trading at a significant discount to share value and represents a potential value play.
- Share repurchases through asset liquidation would unlock substantial value for shareholders.
- Anworth reports EPS of 7 cents per share, total earnings of $8,618 to common shareholders.
- This earnings report confirmed our initial opinion about earnings power.
- The EPS of 7 cents per share came in slightly below our estimate.
Anworth's Q2 Dividend Is Lipstick On A Pig. All Dividends Are Not Created Equal
- Our proprietary model projects net income attributable to common shareholders in Q2 to be $13.485 million, assuming amortization charges of $11 million.
- Anworth invests in 15-year agency MBSs and agency ARM MBSs. The increased use of hedges may be limiting returns to common stockholders by reducing the net interest margin.
- The 15-year MBSs are carried at an amortized premium to par value. NPV analysis indicates the cash flows discounted at spot rates may be worth less than recorded value.
- Anworth has recently undertaken a plan to invest in single-family homes.
- There may be significant agency costs resulting from a conflict of interest.
Major Anworth Shareholder To Fellow Shareholders: Management Continues To Disappoint, Fails To Aggressively Repurchase Shares
- Despite assuring stockholders that it would do so, it appears that Anworth management has not embarked on an aggressive stock repurchase program.
- In an investor presentation on May 2nd, Anworth stated that it has taken and continues to take actions to increase shareholder value, including through its aggressive buyback program.
- Anworth also stated it increased its ongoing share repurchase program by 10,000,000 shares, and in fact, disclosed that in April 2014, nearly 5,000,000 shares had been repurchased.
- We are concerned that Anworth has now drastically curtailed its buybacks, to the detriment of shareholder value.
Major Anworth Stockholder To Fellow Shareholders: Don't Be Fooled By Management's Attempts To Whitewash Past Failures
- Anworth Mortgage has over a decade of negative returns.
- Historic low price-to-book ratio implies a lack of confidence in management.
- Anworth’s poor performance necessitates change.
- We encourage stockholders to vote for our highly-qualified nominees.
- Vote against management’s excessive compensation proposals (#2 and #3).
Attention Anworth Stockholders: Don't Be Fooled By Management's Cherry-Picked Data
- We believe Anworth has been severely mismanaged to date, and stockholders have seen over a decade of investment declines.
- Management has collected almost $80 million in fees over the past decade despite Anworth’s pathetic performance.
- Stockholders cannot receive full value for their shares due to Anworth’s significant discount to per share book value.
- Stockholders may incur significant losses if our nominees are not elected.
Anworth Mortgage Asset Corp. And The Point Of Javelin
- Activists have once again circled an mREIT trading below book value, namely Anworth Mortgage, hoping for a Javelin-type pay day.
- Western Investment LLC has filed a proxy to replace the board, and has raised the prospect of liquidating the REIT to realize book value.
- Javelin Mortgage went through the same process, and subsequently purchased the activist's (Bulldog) shares.
Despite QE3, Anworth Mortgage's 10% Dividend Yield Is Safe
JPM's Anworth Mortgage Upgrade Completely UnfoundedThomas Kelly • Oct. 22, 2007
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ANH vs. ETF Alternatives
Anworth Mortgage Asset Corp is in the business of investing in U.S., agency mortgage-backed securities, or agency MBS, which are obligations guaranteed by the U.S. government, such as Ginnie Mae, or federally sponsored enterprises.
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