Oct. 29, 2014, 5:16 PM
- Q3 core income of $49M or $0.13 per share vs. $50.9M and $0.13 in Q2. Quarterly dividends of $0.15.
- Book value per share of $4.58 slips from $4.90 at end of Q2. Today's close of $4.00 is a 12.7% discount to book.
- Net interest margin of 1.43% slips three basis points from Q2.
- CPR of 7.46% up 234 basis points from Q2.
- Leverage of 8.42:1 vs. 7.9:1 one quarter ago.
- Previously: ARMOUR Residential REIT misses by $0.02
- ARR -0.5% AH
- Previously: ARMOUR Residential REIT misses by $0.02
Oct. 29, 2014, 4:58 PM
Oct. 29, 2014, 1:43 PM
- Fed purchases of mortgage-backed securities are ending today, but reinvestments are likely to keep a firm bid in the market, says Deutsche's MBS team. The "real risk" to the MBS market won't come until the Fed ends reinvestments - early 2016 at the soonest, and maybe not until 2017.
- QE's end, says the team, leaves the Fed with $1.7T in MBS holdings and private investors with just $3.5T. The Fed's massive holdings - 1/3 of the universal amount, but 1/2 of dollar duration - keep a source of volatility out of the market.
- The end of the Fed as a net buyer will be about the first time since the early 1990s when MBS haven't been getting a bid from either the GSEs, Treasury, or Fed.
- ETFs" REM, MORT, MORL
- Names of interest: Annaly (NLY -1.6%), American Capital Agency (AGNC -2.5%), Armour (ARR -1.2%), Hatteras (HTS -1.6%), CYS Investments (CYS -1.7%)
Oct. 9, 2014, 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
Sep. 30, 2014, 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
Sep. 18, 2014, 1:10 PM
- The entire sector is in the red, but the biggest declines are being seen in the industry giants, about the only spots large investors can move a lot of shares quickly: Annaly Capital (NLY -1.6%), American Capital Agency (AGNC -1.6%).
- Yesterday's FOMC statement may have left in the "considerable period" language, but the committee remains on course to begin a rate hike cycle in less than a year.
- Further, the selloff on the long end of the curve can has reached the sizable stage - the 10-year yield is up 32 basis points in a month, and has now erased about all of the summer's decline. Book values could take a hit (though hedging is likely to ease the pain).
- REM -0.7%
- Other ETFs: MORT, MORL.
- Other names: Armour (ARR -1.3%), Invesco (IVR -0.7%), Hatteras (HTS -3%), Capstead (CMO -0.3%), Western Asset (WMC -0.4%)
Aug. 1, 2014, 7:15 AM
- Core income of $50.9M or $0.13 per share vs. $58.3M and $0.15 in Q1. Quarterly dividends of $0.15.
- Book value per share of $4.90 up from $4.67. Last night's close of $4.21 is a 14.1% discount to book.
- Net interest margin of 1.46% slides 36 basis points from Q1.
- Leverage of 7.9:1 vs. 8.12:1.
- CPR of 5.12% vs. 3.68%.
- Previously: ARMOUR Residential REIT misses by $0.03
- ARR fell 0.5% AH last night.
Jul. 31, 2014, 5:06 PM
Jul. 7, 2014, 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.
May 28, 2014, 2:43 PM
- The swoosh down in interest rates - the 10-year Treasury yield is now off 8 bps on the session to just 2.44% - isn't really boosting the mREIT sector (REM -0.1%), and one wonders which managements hunkered down for higher rates and now find themselves overhedged. There's also a flattening yield curve and it wasn't too long ago when the bear case on mortgage REITs was slimming net interest margin, not higher rates.
- Kudos to CYS Investment (CYS +0.5%) management, which - not finding a ton of value in mortgages - loaded up on Treasurys in Q1. The stock is one of the sector's stronger performers YTD, up 24.5%.
- Others today: Annaly (NLY +0.1%), American Capital (AGNC -0.7%), Armour Residential (ARR +0.7%), Hatteras Financial (HTS -0.3%), Capstead Mortgage (CMO -0.2%), Western Asset Mortgage (WMC -0.6%)
- ETFs: MORT, MORL
May 15, 2014, 1:13 PM
- In the red along with the rest of the stock universe all session, a bit of green begins to creep into the mortgage REIT sector (REM -0.4%) as the 10-year Treasury yield tumbles below 2.50%.
- Annaly Capital's (NLY +0.1%) Q1 results were a notable disappointment as management seemingly found itself overhedged while rates fell sharply. One wonders if the hedges were lifted at all for Q2.
- The sector's best performer today is CYS Investments (CYS +1.1%). Management indicated on the April 22 earnings call that it thought mortgages were too pricey, so instead had put a slug of money into Treasurys - a move looking pretty good so far.
- Others: Two Harbors (TWO), Chimera Investment (CIM +0.2%), Armour Residential (ARR -0.1%), AG Mortgage Investment (MITT +0.1%)
- ETFs: MORT, MORL
May 5, 2014, 8:21 AM
- Core income of $58.3M or $0.15 per share compares to $59.3M and $0.15 in Q4; $0.15 quarterly dividend.
- Book value per share of $4.67 slips from $4.75 after payment of $0.15 in dividends. Friday's closing price of $4.25 is a 9% discount to book.
- Leverage of 8.12x up from 6.92x; average net interest margin of 1.82% up 22 basis points; average CPR of 3.68% slips from 4.8%.
- Repurchased 600K shares at average price of $4.31 each.
- Source: Press Release
- ARR no trades premarket
Apr. 29, 2014, 12:12 PM
- The mortgage REIT (REM -0.9%) sector is lower following American Capital Agency Q1 results from after the bell last night. Earnings beat expectations and comfortably covered the $0.65 dividend, but a 2.3% gain in book value may have been somewhat shy of what was hoped for.
- Opinions make markets, and - unlike CYS Investments' management - American Capital CIO Gary Kain does not view the current mortgage market as too pricey to play in.
- Also for fixed income investors to chew on is Apple's upcoming (bell-ringing?) massive debt offering.
- Related ETFs: MORT, MORL.
- Other agency (or mostly so) MBS names: Annaly (NLY -0.7%), Armour (ARR -0.1%), Hatteras (HTS -0.1%), Capstead (CMO), Anworth (ANH -0.2%), Ellington Residential (EARN -0.6%).
Apr. 25, 2014, 4:43 AM
- The amount that lenders originated in mortgage loans plunged 58% on year Q1 to a 14-year low of $235B, almost entirely due to drop in refinancing. The figures are from industry newsletter Inside Mortgage Finance.
- Loans for acquisitions were flat on year and lower than in Q4.
- The trend is the latest indication that increasing interest rates are hampering the housing recovery. The average 30-year fixed-rate mortgage was 4.5% last week, up from 3.6% in May last year, when rates spiked after the Fed indicated it would scale back its QE program.
- Tickers: DHI, PHM, RYL, MHO, NVR, LEN, SPF, MDC, HOV, TOL ORI, NLY, AGNC, MTGE, ARR, TWO, IVR, CMO, MFA, WMC, FMCC, FNMA, RDN, NMIH, ESNT, GNW
- ETFs/ETNs: ITB, XHB, MORT, MORL, REM, MORT, MORT
Apr. 24, 2014, 10:36 AM
- A check of the mortgage REITs (REM +0.1%) finds not a lot going on stock price-wise following the first Q1 earnings reports from the sector this week (CYS Investments and Hatteras). As expected, book values grew and prepayments remained at a low level.
- Perhaps unexpected was a good deal of caution from CYS management about mortgage prices - right now, it's finding better value in Treasurys, and awaits a pullback in MBS prices before boosting those holdings. "The mortgage market is a little kid playing with matches," said CEO Kevin Grant on the earnings call (transcript). "We just don't know when everybody's fingers are going to get burnt. The traders that play in this market, they know this and they know they are playing with matches."
- Amid the low supply of MBS out there, Hatteras (HTS +0.1%) management on its call (transcript) says it now has 10 originators delivering wholesale product to the company covering more than half of monthly cash flow needs. Up next is expansion into jumbo ARMs.
- Other sector ETFs: MORT, MORL
- Individual names: Annaly (NLY +0.6%), American Capital (AGNC +0.7%), (MTGE +0.2%), Armour (ARR +0.1%), Two Harbors (TWO -0.6%), Invesco (IVR -0.1%), Capstead (CMO +0.3%), MFA Financial (MFA +0.1%), Western Asset (WMC +0.5%).
Apr. 4, 2014, 3:15 PM
- What's working today? With the exception of Western Asset Mortgage which had a massive secondary offering, the mREIT sector is nearly universally higher as money rushes out of the previously perkier areas of the market.
- Not hurting is a seven basis point decline in the 10-year Treasury yield to 2.73%.
- Up the most are the two largest and also investor favorites Annaly (NLY +1.4%) and American Capital Agency (AGNC +1.3%). Others: CYS Investments (CYS +1%), American Capital Mortgage (MTGE +0.5%), MFA Financial (MFA +0.5%), Dynex (DX +0.9%), Armour (ARR +0.5%).
- Related ETFs: REM, MORT, MORL
ARR vs. ETF Alternatives
ARMOUR Residential REIT Inc invests in and manages a leveraged portfolio of residential mortgage backed securities. Itinvest in residential mortgage backed securities issued or guaranteed by a United States Government-sponsored entity.
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