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EARN vs. ETF Alternatives
Ellington Residential Mortgage REIT is engaged in acquiring, investing in, and managing residential mortgage and real estate-related assets. It focuses on constructing & actively managing a portfolio comprised mainly of Agency RMBS.
Wednesday, Apr 92:43 PM
Wednesday, Apr 92:43 PM| 8 Comments
- Mixed earlier, a lot more green creeps into the mortgage REIT sector (REM +0.6%) after the FOMC minutes suggest members aren't in as quite of a rush as thought to hike rates. The 10-year note yield is back to flat on the session at 2.68% (was as high as 2.72% pre-release), and the short end is doing even better (steeper curve) with the Dec. 2015 Eurodollar contract higher by six basis points.
- Leading the move higher are American Capital Agency (AGNC +1.1%), Chimera Investment (CIM +1.1%), and Hatteras Financial (HTS +1%). Also among those ahead are Annaly (NLY +0.7%), Anworth (ANH +0.6%), Ellington (EFC +1.3%), (EARN +0.1%), and Javelin (JMI +0.6%).
- Related ETFs: MORT, MORL
Thursday, Mar 133:16 PM
Thursday, Mar 133:16 PM| 9 Comments
- Ports in a storm on a tough day for the major averages (S&P 500 -1.4%), the mREIT sector is mostly in the green, with sector giants Annaly (NLY +1.1%) and American Capital (AGNC +1.1%) leading the way.
- The 10-year Treasury yield is off eight basis points to 2.65%.
- Earlier: Dividend hikes at mREITs? Capstead (CMO +0.9%) and Ellington Residential (EARN +1.9%) boost payouts by 10%.
- Others: Armour (ARR +0.9), CYS Investments (CYS +0.9%), Dynex (DX +0.8%).
Monday, Feb 310:42 AM
Monday, Feb 310:42 AM| 8 Comments
- 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
Monday, Jan 133:08 PM
Monday, Jan 133:08 PM| 7 Comments
- 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.
Monday, Dec 162013, 3:35 PM
Monday, Dec 162013, 3:35 PM| 27 Comments
- The mortgage REIT sector (REM -0.6%) is lower on a bright green day for the rest of the market, with Anworth Mortgage's (ANH -1.2%) 33% dividend cut Friday night offering another excuse to Sell. Anworth is an agency mortgage player, investing mostly in adjustable mortgages. Anworth's new forward yield of 7.5% is so far out of line with the double digits of the rest of the industry, it suggests even more declines are in store for the stock, or big dividend cuts lie ahead for competitors. At $4.19, Anworth is selling for a near-30% discount to September 30 book value.
- Down the most today is American Capital Mortgage (AGNC -2.7%), and its non-agency cousin, American Capital Agency (MTGE -1.7%) is off sharply as well.
- Others: Annaly (NLY -1.3%), Armour (ARR -1.2%), Western Asset (WMC -1.8%), Apollo (AMTG -1.4%), Ellington (EFC -0.4%), (EARN +0.2%)
- Related ETFs: MORT, MORL
Wednesday, Nov 132013, 11:15 AM
Wednesday, Nov 132013, 11:15 AM| Comment!
- The near-indiscriminate selling in mortgage REITs (REM +0.6%) left at least one major bargain as Ellington Residential Mortgage (EARN +10.7%) soars after reporting Q3 core EPS of $0.61 and an increase in book value to $18.80 per share from $18.57 at the end of Q2. This left the stock - prior to today's move - at a whopping 23.7% discount to book.
- The dividend was just $0.50 per share against core earnings of $0.61 - is a special payout coming?
- Ellington Residential is managed by the same crack team which has expertly preserved book value at Ellington Financial (EFC +0.3%), only EFC is a partnership, EARN is a REIT.
- Net interest margin increased 14 bps to 1.77%. The CPR rose to 3.6% from 1.7%.
- Earnings call is just getting underway.
- Press release
- Relevant ETFs: MORT, MORL.
Tuesday, Sep 32013, 12:17 PM
Tuesday, Sep 32013, 12:17 PM| 5 Comments
- Armour Residential (ARR -2.9%), CYS Investments (CYS -2.3%), and Hatteras Financial (HTS -2.5%) are leading the mREIT sector (REM -1.3%) lower as interest rates again move sharply higher.
- Other movers include Annaly (NLY -1.6%), Western Asset (WMC -1.5%), and Ellington (EARN -2.2%), (EFC -2.1%).
- Other ETFs: MORT, MORL.
- Still occasionally lumped in with mREITs, specialty mortgage servicers gain as the market now realizes the value of MSRs increases as rates move higher (fewer prepayments). Ocwen (OCN +4.1%), Nationstar (NSM +2.4%), Walter Investment (WAC +1.8%).
Monday, Aug 192013, 3:09 PM
Monday, Aug 192013, 3:09 PM| 85 Comments
- 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.
Thursday, Aug 152013, 11:12 AM
Thursday, Aug 152013, 11:12 AM| 13 Comments
- Anything paying income is again being particularly hard hit by the rise in Treasury yields (the 10-year now at a 2-year high of 2.8%).
- Selections in mREITs (REM -2.1%), (MORT -1.9%) include RAIT Financial Trust (RAS -4.1%) - whose IRT had an ill-timed IPO yesterday and Ellington Residential (EARN -4.8%) - the market not caring about reasonable Q2 performance, a hefty discount to book, and the launch of a repurchase program. Other mREITs: CYS Investments (CYS -3.6%), Apollo (AMTG -3%), Newcastle (NCT -5%), Invesco (IVR -2.7%), Arlington Asset (AI -1.2%). A leveraged ETF play: MORL.
- Hanging in there relatively well are the BDCs: Fifth Street (FSC -1.3%), Triangle (TCAP -1%), MCG (MCGC -1.2%), Hercules (HTGC -1.2%), Ares (ARCC -0.3%).
- BDC ETFs: BDCS, BDCL, BIZD.
- In emerging markets fixed income, a trader takes note of EDD, a closed-end fund now trading at more than a 15% discount to NAV.
- Emerging market bond ETFs: EMB, LEMB, PCY, EMLC, ELD, PFEM, EBND, VWOB.
Tuesday, Aug 132013, 10:11 AM
Tuesday, Aug 132013, 10:11 AM| 2 Comments
- Ellington Residential Mortgage (EARN +1.3%) follows through on yesterday's late-day surge, with earnings set to be released tomorrow morning.
- David Schawel speculates book value could come in north of $18 per share (after the big run, the stock is currently at $16.21).
- Pine River Capital (the managers of Two Harbors TWO, and investors in a number of other REITs) disclosed a 5.5% stake in EARN on Friday.
- EARN (a REIT) is managed by the same group who runs Ellington Financial (EFC, a partnership/hedge fund). EFC - which reported its Q2 last week - thus far has navigated its way through the MBS rout as well as anyone.
Friday, Jul 52013, 11:23 AMMore on the carnage in mREITs (REM -5.2%): The pain seems worst for agency REITs and those most exposed to fixed rates. Western Asset (WMC -9.8%), Ellington Residential (EARN -6.5%), AG Mortgage (MITT -7.5%), Apollo (AMTG -6.7%). Owners of ARMs like Hatteras (HTS -6.6%) and Capstead (CMO -6.4%) aren't spared either. Less torched are stocks like Dynex (DX -2.7%) and Ellington Financial (EFC -3.3%) - both with plenty of non-agency paper on their books and thought to be a well-hedged as they come (yes, we know EFC is a partnership, not an mREIT). |Friday, Jul 52013, 11:23 AM| 2 Comments
Friday, May 312013, 12:59 PMRenewed selling hits mREITs (MORT -1.2%) as Treasury yields turn decidedly higher, TLT -0.8%. Getting the worst of it today is Ellington Financial (EFC -3.3%) - a partnership, not a REIT; it's more trading shop, but still leveraged to credit and interest rates. It's recently IPOd mortgage REIT counterpart EARN -1.1%. Also notably lower is CYS Investments (CYS -2.6%), American Capital (AGNC -1.8%), (MTGE -1.5%), Annaly (NLY -1.3%), and Armour Residentail (ARR -1.3%). |Friday, May 312013, 12:59 PM| 15 Comments
Wednesday, May 12013, 10:26 AMEllington Residential Mortgage REIT (EARN -4.1%) slides in early trade after pricing its IPO at $20/share. Total gross proceeds of the offering are $129M. The company is run by the same team in charge of Ellington Financial (EFC), but structured as a REIT instead of EFC's partnership. |Wednesday, May 12013, 10:26 AM| Comment!
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Chris DeMuth Jr.:: kitstricker -- Nope, but tempted.
Biological:: JMT looks interesting; sells at 9% disc to NAV, portfolio is made up of RMBS at 65% of par and recently paid LT gains. But high risk pool.
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Darren McCammon:: They didn't sell off assets at the lowest prices of the quarter. Had only NLY, ARR, AGNC, etc. shown similiar restraint.
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Albert Alfonso:: High-yield anything is out of favor ATM. MLPs, mREITs, BDCs, etc