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CYS Investments, Inc. (CYS)

- NYSE
  • Fri, Aug. 21, 3:30 PM
    • These income favorites often catch a wave of buying when the major averages sell off and yields fall, but the panicky action today is taking down nearly all equities.
    • The iShares DJ U.S. Real Estate ETF (IYR -1.7%) and the iShares FTSE NAREIT Mortgage REIT ETF (REM -1.6%), however, are outperforming the S&P 500's 2.7% decline.
    • Previously: Just a modest rally for Treasurys as stocks crumble (Aug. 21)
    • Leading the mREITs lower is Javelin Mortgage (JMI -5.9%), with SA contributor ColoradoWealthManagementFund noting the company has stopped buying back stock despite its wide discount to book value. The sector as a whole looks like it will continue to have to deal with widening spreads and rising prepayments, and still have a looming rate hike cycle on the horizon.
    • Armour Residential (ARR -2%), CYS Investments (CYS -1.8%), Annaly (NLY -1.2%), American Capital Agency (AGNC -1.8%), Arlington Asset (AI -2.4%), Orchid Island (ORC -2.5%), Dynex (DX -2%), Capstead Mortgage (CMO -1.3%).
    • Equity REITs: Realty Income (O -0.7%), Vereit (VER -2.3%), Health Care REIT (HCN -1%), HCP (HCP -1.1%), Gramercy Property (GPT -3.1%), Equity Residential (EQY -1.6%), Simon Property (SPG -0.5%), Kimco (KIM -2.1%), Hospitality Properties (HPT -2.8%), Stag Industrial (STAG -1.4%), American Campus (ACC -1.1%), Public Storage (PSA -1%).
    | 38 Comments
  • Tue, Aug. 11, 12:59 PM
    • The Fed may be determined to hike rates, but deflationary signals are everywhere, with Beijing the latest government to acknowledge such with its devaluation overnight.
    • Crude oil has taken out a new six-year low, tumbling another 4% to $43.15 per barrel, and copper's 3% decline has brought it to a fresh six-year low. The grains are all down by 2% or more, but gold is marginally higher.
    • The major U.S. averages are down more than 1%, and Europe fell 1.5% today.
    • The 10-year Treasury yield is lower by a full ten basis points to 2.13%.
    • Leading the heavily discounted mREIT sector higher are Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.3%), CYS Investments (CYS +1.2%), New York Mortgage (NYMT +1.6%), Hatteras Financial (HTS +1.3%), Capstead (CMO +1%), Anworth (ANH +1.4%), Dynex Capital (DX +2.6%), and AG Mortgage (MITT +1.6%).
    • ETFs: MORL, REM, MORT, LMBS
    • In equity REITs: National Retail (NNN +1.2%), Equity Residential (EQR +1.5%), AvalonBay (AVB +1.2%), General Growth (GGP +1.9%), Kimco (KIM +1.4%), Whitestone REIT (WSR +2.9%), Washington Real Estate (WRE +1.2%), Hospitality Properties (HPT +2.3%), Chamber Street (CSG +1.1%).
    • ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, ICF, SRS, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, FTY, PSR, DRA, FREL, WREI, IARAX
    | 21 Comments
  • Tue, Jul. 28, 9:52 AM
    • Investors take a least a small hiatus from selling the mortgage REITs after last night's clunker of an earnings report from American Capital Agency (AGNC +2%).
    • Book value fell by 6% during Q2, with higher rates, widening MBS spreads, and faster prepayments making for an ugly combination.
    • The company, however, entered Q3 with its lowest leverage since the financial crisis, giving it the firepower to buy assets on the cheap. At the close yesterday, the stock was selling for a 22% discount to June 30 book value. At some point, the bad news is priced in?
    • The earnings call is set for 11 ET.
    • Annaly Capital (NLY +1.6%), CYS Investments (CYS +0.8%), Western Asset (WMC +1.2%), New York Mortgage (NYMT +0.5%).
    • ETFs: MORL, REM, MORT, LMBS
    | 13 Comments
  • Fri, Jul. 24, 3:01 PM
    • Just a 1% decline in the major averages (which are being helped by some high-profile earnings moves) is masking far greater carnage in a number of other sectors, notably healthcare (XLV -2.5%) and energy (XLE -2%).
    • Business development companies and mortgage REITs are being socked again as well, suggesting the worry may go beyond interest rates and to credit in general, especially as commodity prices continue to tumble - to pick one, crude oil at $48.06 per barrel is at its lowest price in about four months.
    • Among BDCs: Hercules Technology Growth (HTGC -4.2%), Triangle Capital (TCAP -3.3%), PennantPark Investment (PNNT -5.4%), Prospect Capital (PSEC -1.4%), Main Street Capital (MAIN -2.8%), TICC Capital (TICC -2.4%), KCAP Financial (KCAP -2.6%), THL Credit (TCRD -2.7%), FS Investment (FSIC -1.8%).
    • Among mREITs: Armour Residential (ARR -3.1%), Two Harbors (TWO -0.9%), CYS Investments (CYS -2%), Invesco Mortgage (IVR -1.5%), Capstead Mortgage (CMO -1.2%), Apollo Residential (AMTG -2.6%), Arlington Asset (AI -3.7%), American Capital Mortgage (MTGE -0.9%), Orchid Island (ORC -5.8%).
    • MReit ETFs: MORL, REM, MORT, LMBS
    • BDC ETFs: BDCL, BDCS, BIZD, FGB
    | 82 Comments
  • Thu, Jul. 23, 9:19 AM
    • Speaking on the earnings call, CEO Kevin Grant says the big jump in long rates forced mark-to-market losses on the portfolio that exceeded gains on hedges, thus causing the sizable loss (8.6%) in book value for the quarter.
    • The flip side of that would be prepayments, says Grant, and while CPR rose for the quarter, the effect of higher rates should cool that metric going forward. Q2 should be the "high water" mark for prepays for the next couple of quarters, says management.
    • Conference call webcast
    • Lower by 4.6% premarket, CYS is now off about 20% over the past three months, and trading at nearly a 24% discount to June 30 book value.
    • Should the company get more aggressive with buybacks? Grant doesn't want to let the world know when he's in the market buying back stock, but says if the math works, the company will be repurchasing shares. 1.29M were bought back in Q2.
    • Previously: Rough quarter for CYS Investments as long rates jump (July 22)
    • Previously: CYS Investments reports Q2 results (July 22)
    | Comment!
  • Fri, Jun. 26, 3:31 PM
    • Equity REITs are mostly being spared any punishment today, but mortgage REITs are hitting multi-year lows across the board as the 10-year U.S. Treasury yield climbs seven basis points to 2.48%.
    • Annaly Capital (NLY -4.7%) hasn't seen a price this low since Alan Greenspan was nearing the end of his rate hike cycle in 2000. American Capital Agency (AGNC -3.7%) is at its lowest price since the bottom of the financial crisis.
    • Armour Residential (ARR -2.9%), Two Harbors (TWO -4.5%), Chimera Investment (CIM -4.8%), CYS Investments (CYS -3.7%), American Capital Mortgage (MTGE -5.4%), Capstead Mortgage (CMO -4.5%), Anworth Mortgage (ANH -4.3%), AG Mortgage (MITT -3.3%), Ellington Residential (EARN -5.3%), Orchid Island (ORC -3.9%).
    • ETFs: MORL, REM, MORT, LMBS
    | 128 Comments
  • Thu, Jun. 25, 4:17 PM
    • The XLU underperformed again today, losing 0.7% and bringing its year-to-date decline to more than 12%.
    • Looking at equity REITs, the IYR dipped another 0.95% and VNQ fell 1%. Both are down about 6% in 2015, and roughly 15% since late January. Some individual names: Spirit Realty (SRC -2.8%), Senior Housing (SNH -1.2%), HCP (HCP -1.4%), American Realty Capital (ARCP -3%), Gramercy Property (GPT -2.8%), Duke Realty (DRE -2%).
    • In mortgage REITs, REM lost 0.9% today and is off 7% YTD. Some individual names: American Capital Agency (AGNC -1.2%), Armour (ARR -1%), CYS Investments (CYS -0.9%), Annaly Capital (NLY -0.8%), Invesco Mortgage (IVR -1.2%), Apollo Residential (AMTG -1.1%), PennyMac Mortgage (PMT -2.3%), Western Asset Mortgage (WMC -2.7%).
    • The 10-year Treasury yield gained three basis points to 2.40%.
    • Previously: Sell-side abandoning REITs as rates rise (June 25)
    • ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, ICF, SRS, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, FTY, PSR, DRA, FREL, WREI, IARAX
    | 74 Comments
  • Wed, Jun. 17, 8:24 AM
    • In the middle of a tough run for the mREIT sector, BAML picks four to downgrade from Neutral to Underperform.
    • The operating backdrop for mREITs remains challenging, says BAML, and higher rates, widening spreads, and increased volatility will continue to pressure shares. A flatter yield curve, says BAML, means potential dividend cuts.
    • American Capital Agency (NASDAQ:AGNC-1.3%, CYS Investments (NYSE:CYS-1.5%, Hatteras Financial (NYSE:HTS-1.1%, Dynex Capital (NYSE:DX-1% premarket
    • ETFs: MORL, REM, MORT, LMBS
    | 79 Comments
  • Thu, Jun. 11, 3:05 PM
    • Interest rates retreating from near-one-year highs are helping, but the sector is looking very cheap as investors anticipate falling book values and/or slashed dividends.
    • American Capital Agency (AGNC +1.9%) - prior to today's action - was trading at a 21.9% discount to May 31 book value and yielding 12.31%.
    • Previously: American Capital Agency discount to book value widens (June 10)
    • CYS Investments (CYS +1.4%) cut its dividend by 6.7% earlier this week, and is trading at a 17.9% discount to March 31 book.
    • Annaly Capital (NLY +1.3%) hasn't yet declared its Q2 dividend, but is trading at a 22.5% discount to March 31 book.
    • ETFs: MORL, REM, MORT, LMBS
    | 44 Comments
  • Fri, Jun. 5, 3:57 PM
    | 89 Comments
  • Tue, May 5, 10:31 AM
    • A big move higher in interest rates continues, with the 10-year Treasury yield up another six basis points to 2.20% - roughly the level at which it started the year (it fell as low as 1.65% in early February).
    • The move here is small-time compared to what's going on across the pond, as the absurd levels of two weeks ago become somewhat less absurd. Ten-year Bund yields are up to 0.51% from 0.05%. Italian 10-years are up 30 bps today to 1.78%, with a similar move in Spain.
    • The IYR is down 1.1%.
    • Individual names: Realty Income (O -1.3%), Senior Housing Properties (SNH -1.5%), Medical Properties Trust (MPW -2.4%), Gramercy Property Trust (GPT -1.8%), Equity Residential (EQR -1.4%), AvalonBay (AVB -1.5%), Government Properties (GOV -2.3%), Pebblebrook Hotel (PEB -2%), Eastgroup Properties (EGP -1.6%), American Campus (ACC -1.4%).
    • Mortgage REITS (REM -0.6%) are outperforming the equity names: Annaly (NLY -0.7%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -0.7%), CYS Investments (CYS -0.3%), Invesco (IVR -0.2%).
    | 21 Comments
  • Wed, Mar. 18, 2:30 PM
    • Worries about a sharply flatter yield curve abate just a bit as the FOMC drops "patient" from its policy statement - putting rate hikes on the table at subsequent meetings - but Fed economic projections send a dovish signal, with outlooks for economic growth, inflation, and the pace of rate hikes all cut from previous estimates.
    • Outperforming the averages: Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.5%), Two Harbors (TWO +1.5%), CYS Investments (CYS +2%), Invesco (IVR +1.7%), Hatteras (HTS +1.7%), Capstead (CMO +2.1%), MFA Financial (MFA +1.7%), Anworth (ANH +2.2%), Dynex (DX +1.5%), Five Oaks (OAKS +3.3%).
    • ETFs: REM, MORT, MORL
    • Previously: FOMC drops "patient," but sends dovish signal (March 18)
    | 9 Comments
  • Fri, Mar. 6, 10:21 AM
    • The 10-year Treasury yield has popped all the way to 2.24% (up 11 bps on the session) following the strong jobs report which saw 295K jobs added in February and the unemployment rate dropping to 5.5%.
    • Checking short-term interest rate futures, they're falling (meaning higher rates), but still not pricing in a rate hike until late summer.
    • Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -1%), Armour (ARR -0.9%), Invesco (IVR -0.9%), CYS Investments (CYS -1.4%), Hatteras (HTS -1.1%), MFA Financial (MFA -1.1%), Western Asset (WMC -0.7%), Dynex (DX -1.2%), AG Mortgage (MITT -1.5%), Ellington Residential (EARN -1.1%).
    • ETFs: REM, MORT, MORL
    • Previously: Dollar and Treasury yields spike after strong jobs print (March 6)
    | 44 Comments
  • Thu, Feb. 12, 12:03 PM
    • CYS Investments (CYS +1.7%) was notable last year for its belief that long-term interest rates weren't heading higher, and its move to take a sizable long position in long-dated Treasury paper. Adding together dividends and the gain in book value in 2014, CYS posted a ROE of 27%, including 6.51% in Q4 (reported last night).
    • Speaking on the earnings call (transcript), CEO Kevin Grant notes 10-year U.S. Treasurys continue to look cheap compared to European and Japanese paper.
    • Management, however, is working under the assumption that the Fed is "really desperate to get out of ZIRP," and cautions investors to expect thinner spreads and maybe a smaller dividend going forward. On the other hand, Fed tightening could cause bond market disruptions, and CYS has ample dry powder ready to get put to work.
    • Previously: CYS Investments income and book value grow in Q4 (Feb. 11)
    | 2 Comments
  • Tue, Feb. 3, 3:52 PM
    • Unable to put any sort of positive move together even as interest rates tumbled this year, mREITs (REM +0.9%) are uniformly higher this session as the 10-year yield jumps 11 basis points to 1.78%.
    • American Capital Agency (AGNC +1.3%) reported better-than-hoped Q4 results last night, but has altered its mix of portfolio holdings and hedges to brace for what it expects will be a wave of prepayments. If rates keep this up, those prepayments may not materialize.
    • Annaly (NLY +1.1%), Chimera (CIM +1.5%), CYS Investments (CYS +1.3%), American Capital Mortgage (MTGE +1.8%), Hatteras (HTS +1.1%), MFA Financial (MFA +1.3%), Western Asset (WMC +1.8%), Dynex (DX +1.1%), Ellington Financial (EFC +1.2%).
    | 18 Comments
  • Mon, Feb. 2, 2:52 PM
    • "The combination of a negative duration and relatively long dated hedges lead to book value underperformance in a flat curve environment," merits a downgrade to Underperfrom for Armour Residential (ARR -5.9%), says analyst Doug Harter.
    • "With above-average economic return volatility we expect CYS Investments (CYS -2.8%) to continue to have one of the lower price to book multiples among the Agency-only REITs," he says, also cutting to Underperform.
    • Tight credit spreads combining with low yields will make it tough for New York Mortgage Trust (NYMT -2.2%) to meaningfully expand core EPS enough to cover the dividend, says Harter, cutting that stock to Underperform. He also notes NYMT has the highest price-to-book ratio in his mREIT coverage universe.
    • Harter and team, however, still see some attractive values given the 12.9% discount to book the sector is selling for. PennyMac Mortgage Investment (PMT +0.2%), Two Harbors (TWO -0.7%) and New Residential (NRZ -1.6%) remain among top picks (though PMT and especially NRZ can hardly be considered mREITs).
    • Previously: Credit Suisse downgrades three mortgage REITs (Feb. 2)
    • Previously: JPMorgan previews Q4 for mREITs (Feb. 2)
    | 12 Comments
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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