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CYS Investments, Inc. (CYS)

  • Feb. 10, 2014, 4:13 PM
    • Net asset value per share of $9.24 after $0.32 dividend is off a big 8.5% from the end of Q3, and compares to today's close of $8.38, putting the stock at a 9.3% discount to Dec. 31 book.
    • Leverage of 6.97:1 compares to 6.45 at end of Q3. Net interest spread of 1.89% is up a big 23 basis points from Q3. CPR of 5.7% compares to 9.8% in Q3. CPR in January of 5.9%.
    • 5.2M shares repurchased during Q4 at average price of $8.28 each. For full year, company bought back 13.6M shares at average price of $8.49.
    • "The higher rate environment has created an improved investing environment, which should allow the company to generate an attractive dividend while operating at the low end of its leverage range, which should reduce volatility in the company's net asset value."
    • Press release, Q4 results
    • CC tomorrow at 9 ET.
    • CYS +0.7% AH
    | Comment!
  • Feb. 10, 2014, 4:04 PM
    • Cypress Sharpridge Investments (CYS): Q4 EPS of $0.31 beats by $0.07.
    • Press Release
    | Comment!
  • Feb. 10, 2014, 12:10 AM
  • Feb. 9, 2014, 5:35 PM
  • Feb. 4, 2014, 11:51 AM
    • Addressing an analyst cadre somewhat uncomfortable with American Capital's (AGNC +1.6%) new policy of purchasing the common stock of its agency mREIT competitors (Wells' Joel Houck: Do you know their hedging strategies? What happens when one blows up?), CIO Gary Kain says the discounts to asset value are so great as to mitigate much of the risk.
    • Kain does acknowledge some risks though, and reminds that the purchase program is but a small slice of AGNC's overall portfolio ($400M of others' stock bought so far vs. nearly $600M of AGNC buybacks just in Q4).
    • For now, there won't be any disclosure of which names American Capital is buying - a position also not sitting well with those on the call. Should the positions get large enough though, regulatory filings might be required.
    • Kain also reminds that AGNC isn't just boosting risk with these purchases - instead it's selling MBS at 100 cents on the dollar to buy them back (via other mREITs) at somewhere in the area of 80 cents on the dollar.
    • Most of the mREIT sector (REM +0.7%) is ahead again today - Armour (ARR +0.9%), CYS (CYS +2.8%), Hatteras (HTS +1.6%), American Capital Mortgage (MTGE +0.6%), PennyMac (PMT +1.2%) - but Annaly (NLY -0.6%) lags, perhaps as investors feel it was far more conservatively positioned going into 2014 than AGNC was.
    • Earnings call is still ongoing
    • Previous coverage
  • Feb. 3, 2014, 10:42 AM
    • The poor ISM number and resultant drop in interest rates provides more manna to the rebounding mREITs (REM), with Annaly (NLY +1.7%), Western Asset (WMC +1.9%), CYS (CYS +0.9%), Capstead (CMO +1%), and Ellington (EFC +0.8%), (EARN +0.2%) among those leading the sector this morning.
    • Capstead was the first of the mREITs to report Q4 results, but American Capital (AGNC +0.9%), (MTGE -0.1%) reports on Wednesday, and investors will want to see if Gary Kain and team - so worried about higher rates - hedged away any gains to be made from their fast decline thus far this year.
    • Related ETFs: MORT, MORL
  • Jan. 30, 2014, 10:20 AM
    • You're seeing a lot of demand in the assets we hold, says Capstead Mortgage (CMO +1.5%) management on the conference call after reporting a blowout Q4. In a steepening yield curve environment - the short-end anchored while long rates move higher - Capstead is benefitting from tightening spreads in the 5/1 ARMs it mostly holds.
    • Mr. Market seems to have fleshed this out, and Capstead was already trading for right around book value (reported at $12.47 as of Dec. 31) vs. the double-digit discounts for long-end players like Annaly (NLY +0.2%), American Capital (AGNC -0.3%), Armour (ARR), and CYS Investments (CYS -0.5%).
    • Another in the adjustable-rate arena is Hatteras Financial (HTS +1.5%).
    • Related ETFs: REM, MORT, MORL
  • Jan. 23, 2014, 2:23 PM
    • One sector nearly fully in the green on a big down day for the broad averages is the mortgage REITs (REM +0.6%) as investors - worried about further declines in book value - take comfort from a big 10 basis point dip in the 10-year Treasury yield to 2.76% (off from 3% at the start of the year).
    • Leading are CYS Investments (CYS +3.1%), Annaly (NLY +1.7%), American Capital (AGNC +1.4%), (MTGE +1.5%), Invesco (IVR +1.8%), Anworth (ANH +1.3%), and AG Mortgage Investment (MITT +0.7%). The sector elephants - Annaly and American Capital Agency - are head 6% and 8% YTD, respectively.
    • With the big drop in yields at the long end, how long will it be before investors stop fretting about declines in book value and shift to concern over narrowing spreads!
    • Related ETFs: MORT, MORL
  • Jan. 13, 2014, 3:08 PM
    • What might pull the mREIT sector out of its brutal slump? A slide in the broad equity market for one. An out of nowhere 1%-plus dive in the major averages is being felt in the bond market, where the 10-year yield is off another 3 basis points to 2.83%, and mortgage REITs (REM +0.4%) - whose book values have been savaged by the big jump in interest rates since last spring - are responding.
    • Annaly (NLY +1.2%), American Capital (AGNC +1.4%), (MTGE +1.1%), Two Harbors (TWO +1.4%), CYS (CYS +1.9%), Western Asset (WMC +1.5%), AG Mortgage (MITT +1.1%), and Ellington Residential (EARN +0.8%) are leading. This just in: Sector giants American Capital Agency and Annaly are ahead 6% and 4% YTD, respectively.
    • The iShares 20+ Year Treasury Bond ETF (TLT +0.6%) is up 3.2% for the year.
  • Jan. 10, 2014, 11:18 AM
    • It's a big dip in interest rates today (the 10-year yield off 8 bps to 2.88%), but buyers are doing little more than tiptoeing back into beaten-down mortgage REITs.
    • Leading are Annaly (NLY +1.3%) and American Capital (AGNC +1.4%), (MTGE +1.1%), and Armour (ARR +0.7%), CYS Investments (CYS +1.2%), and Invesco (IVR +1.1%) are also posting decent gains. All are quietly up in the area of 5-10% off of their 52-week lows set late last year.
    • Related ETFs: REM, MORT, MORL
  • Dec. 10, 2013, 11:12 AM
    • The mREIT sector (REM +1.2%) is up for a 2nd consecutive day, with Hatteras Financial's (HTS +1.5%) 9% dividend cut overnight not hurting the stock and suggesting maybe a lot of bad news has been priced in. Core income in Q3 was $0.44 per share and the new payout is $0.50.
    • Another adjustable-rate mortgage player, CYS Investments (CYS +2.4%) is also ahead, as is Capstead Mortgage (CMO +0.9%). Others: Annaly (NLY +1.5%), American Capital (AGNC +1.7%), Invesco (IVR +2.4%), Western Asset (WMC +1.3%).
    • Related ETFs: MORT, MORL
  • Dec. 6, 2013, 4:23 PM
    • CYS Investments, Inc. (CYS) declares $0.32/share quarterly dividend, 5.88% decrease from prior dividend of $0.34.
    • Forward yield 17.20%
    • Payable Dec. 27; for shareholders of record Dec. 17; ex-div Dec. 13.
    | 1 Comment
  • Dec. 6, 2013, 11:42 AM
    • There's a bit of green spreading across the mREIT sector this morning as Treasurys reverse an early plunge following the strong jobs report - the 10-year yield is now off 3 basis points to 2.85% after climbing to 2.93% just after the 8:30 ET release.
    • However, there's no relief for sector leaders Annaly (NLY -1%) and American Capital Agency (AGNC -1.5%), both of  which continue to reel following Goldman's Sell recommendation yesterday - each have carved out new 52-week lows this morning. There may be plenty of players in the mREIT sector, but for the institutional big boys who have the Goldman report on their desks, there's just NLY and AGNC. Others in the red include: Armour (ARR -0.7%) and CYS Investments (CYS -1.1%).
    • Posting gains: Chimera (CIM +0.8%), Invesco (IVR +0.2%), Hatteras (HTS +0.2%), Dynex (DX +0.7%), New York Mortgage (NYMT +0.3%), Apollo Residential (AMTG +0.7%), Javelin (JMI +1.1%), AG Mortgage Investment (MITT +2.3%).
    • Related ETFs: REM, MORT, MORL.
  • Dec. 5, 2013, 1:17 PM
    • A check of the mortgage REITs following Goldman's interestingly-timed initiation of Annaly (NLY -1.6%) and American Capital Mortgage (AGNC -1.1%) with Sells finds the sector (REM -0.8%) again underperforming the broad market.
    • To review: Annaly is off about 40% in 8 months and American Capital is off about 42% in 7 months. Yes, higher interest rates have delivered a hit to their portfolios (which tend to be longish in duration), but investor distaste for the names also has both trading at roughly 20% discounts to their book values.
    • So is the call late? Maybe. On the other hand, one well-known hedge funder defines a 50% loss as holding a stock that goes from being down 80% to being down 90%.
    • Other names of interest: CYS Investments (CYS -0.4%), Western Asset (WMC -1%).
    • Related ETFs: MORT, MORL
  • Dec. 2, 2013, 3:48 PM
    • There's no mercy for the mREIT sector (REM -1.6%) as this morning's strong economic data sends the 10-year Treasury yield five basis points higher to 2.80%. Among the new 52-week lows today are sector giants Annaly (NLY -1.6%) and American Capital Agency (AGNC -1.8%).
    • Also down sharply are Armour (ARR -2.4%), CYS Investments (CYS -2.4%), Dynex (DX -2.5%), American Capital Mortgage (MTGE -2.8%), AG Mortgage (MITT -2.4%), and Arlington Asset (AI -3.1%).
    • Management matters, and investors have clearly lost some faith in the leadership of Annaly and American Capital - both of which trade at more than 20% discounts to book value. The newest favorite is that of Ellington Financial (EFC), where management has mostly been able to preserve book value this year. Company structure may have helped too - Ellington is a partnership, not a REIT and has somewhat more flexibility with its portfolio. The stock trades at just a 6% discount to October 31 reported book.
    • ETFs: MORT, MORL
  • Nov. 26, 2013, 1:54 PM
    • At what point do you just liquidate the portfolio? Habits die hard and traders used to hitting the sell button on the mREITs (REM -0.5%) are doing so again today even as interest rates slide a bit.
    • Hitting another multi-year low today, Annaly (NLY -1.3%) - with a portfolio of very liquid assets heavily hedged against rising rates - is now selling for 20% less than September 30's reported book value.
    • American Capital Agency (AGNC -0.8%) - with an equally liquid hedged portfolio - is also at about a 20% discount. Previous: CIO Kain promises to continue buybacks at this discounted level.
    • Other agency players: Hatteras (HTS -1%), CYS (CYS -1.4%), Capstead (CMO -1%).
    • Non-agency mREITs are slipping as well - even as Case-Shiller reports continued solid gains in home prices (which should boost portfolio values). Two Harbors (TWO -1.5%), MFA (MFA -1.4%), Western Asset (WMC -1.1%).
    • ETFs: MORT, MORL
CYS vs. ETF Alternatives
Company Description
CYS Investments Inc is a specialty finance company that invests on a leveraged basis in residential mortgage pass-through securities for achieving consistent risk-adjusted investment income.
Sector: Financial
Country: United States