PR Newswire (Aug 11, 2014)
PR Newswire (Jun 17, 2014)
PR Newswire (May 27, 2014)
Tue, Aug. 12, 7:37 AM
- Q2 core earnings of $6.8M or $0.75 per share vs. $7M and $0.77 in Q1. Dividend is $0.55.
- Book value of $18.71 per share vs. $18.05 at end of Q1. Last night's close of $16.82 is a 10.1% discount to book.
- Net interest margin of 2.33% is off one basis point from Q1. CPR of 4% up from 2.2%.
- Noting the pleasing rise in RMBS prices in Q2, management believes continued Fed tapering and a potential rise in mortgage originations could ultimately pressure valuations. The team continued to add interest rate hedges during Q2, taking what it hopes to be a temporary hit to profits.
- Conference call at 11 ET
- EARN flat premarket
- Previously: Ellington Residential Mortgage REIT EPS of $0.75
Mon, Aug. 11, 5:04 PM
Thu, Jul. 3, 9:56 AM
- A few days ago, the 10-year Treasury yield stood at about 2.50%, but it's been on the rise all week and shot up to near 2.7% this morning following the strong jobs print and drop in unemployment to 6.1%. Checking the short end of the curve, Eurodollar futures are selling off as well, and now have baked in more than one rate hike between now and one year from now, and 75 basis points of hikes by the end of 2015.
- Previously: Treasury yields jump, gold slumps after strong jobs print
- Off 1.1% today, Annaly Capital (NLY) is down nearly 5% since this time last week, with a similar move having taken place in American Capital Agency (AGNC -1.2%).
- Chimera (CIM -1.4%), CYS Investments (CYS -1%), Invesco Mortgage (IVR -1.8%), American Capital Mortgage (MTGE -1.6%), New York Mortgage Trust (NYMT -1.2%), AG Mortgage (MITT -1.8%), Ellington Residential (EARN -0.7%), Dynex (DX -0.8%), MFA Financial (MFA -0.9%).
- ETFs: REM, MORT, MORL
Tue, Jun. 17, 4:33 PM| Comment!
Tue, Jun. 3, 10:50 AM
- "Our core belief is that we do not know where interest rates are going," says Ellington Management (EFC, EARN) presenting at KBW.
- Presentation slides and webcast
- He notes both Ellington Financial (EFC) and Ellington Residential (EARN) cruised through the sharp rise in interest rates last year, with book values remaining largely intact. While EFC's portfolio is 85% non-agency & credit plays and 15% agency, EARN is the flip, with 85% agency and 15% non-agency.
- EFC's current dividend yield is 12.8% and management expects the quarterly payout of $0.77 to continue. The board will consider a special dividend at the end of the year.
- Other notes: Ellington's been talking about investing in an origination platform for about a year, and, now that mortgage originations look to have bottomed, that day appears to be getting closer. "The market is coming to us." By the end of the year, says the team, odds are good Ellington will have stakes in one or two originators.
Tue, May. 13, 8:03 AM
- Core earnings of $7M or $0.77 per share vs. $6.8M or $0.74 in Q4. Dividend of $0.55.
- March 31 book value of $18.05 per share slips from $18.29 on December 31 after payment of dividend. Much of the sizable discount to book has been narrowed as yesterday's close was $17.11.
- Net interest margin of 2.34% up 17 bps; CPR of 2.2% in unchanged; leverage of 7.8:1 about unchanged.
- "The Company remains generally positive in its outlook for non-Agency RMBS, both on fundamental and technical grounds."
- No share repurchases during quarter
- CC at 11 ET
- Source: Press Release
- Previously: Ellington Residential Mortgage REIT EPS of $0.77
- EARN no trades premarket
Mon, May. 12, 6:45 PM
Tue, Apr. 29, 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%).
Wed, Apr. 9, 2:43 PM
- 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
Thu, Mar. 13, 3:16 PM
- 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%).
Wed, Mar. 12, 5:30 PM| Comment!
Fri, Feb. 21, 11:51 AM
- The foreclosure pipeline drying up, Wall Street's single-family landlords increasingly look to scooping up soured mortgages as a way to build units. Leading the way are American Homes 4 Rent (AMH), Starwood Waypoint (SWAY +0.1%), and Altisource Residential (RESI -6.5%). The shift comes as home prices - especially in the most distressed markets - rise, and as foreclosure starts drop to their lowest level since 2006.
- SWAY invested $219.7M for 1,736 non-performing loans vs. $707.5M for 5,049 purchases of houses, according to a recent presentation. That works out to $127K per loan vs. $140K per house. Co-CEO Doug Brien says 30-50% of NPLs will end up as rentals for the company.
- As foreclosures fall, sales of NPLs continue to ramp, led by the government and the nation's banks. $34.7B of NPLs were sold last year against just $13.1B in 2012, according to Mission Capital Advisors. Speaking on the earnings call yesterday (transcript), RESI CEO Ashish Pandey says he thinks NPL sales will hit $40B this year.
- Also in on the action is Ellington Management (EFC, EARN) which says delinquent loans are trading at about 65-80% of property values.
- The nation's largest landlord, Blackstone (BX +0.8%) - once purchasing as much as $100M of homes per week - has slowed the pace and its single-family unit has no plans to get into the NPL market (though another Blackstone-backed firm is heavily into it).
Mon, Feb. 3, 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
Tue, Jan. 28, 10:38 AM
- “Banks have made a decision internally that a delinquent borrower is not a core customer,” says Altisource Residential (RESI) chief Ashish Pandey who expects as many as 500K non-performing mortgages to be sold in 2014.
- Altisource is among a number of firms and hedge funds standing to benefit as banks unload into the recovering market. Ellington Management (EFC, EARN) and Starwood Property Trust (STWD) are also targeting the soured loans. "The supply of NPLs is going to be very substantial for the next several years," says Ellington CEO Mike Vranos, whose firm expects transactions this year will exceed last year's $25B.
- Another seller is HUD, which since 2010 has sold 50K non-performing mortgages insured by the FHA and plans more this year. Winners of a December auction were Bayview Financial (backed by BX) and Lew Ranieri's Selene Investment Partners. They paid an average of 52% of the $2.6B in loan balances, or 69% of estimated property values.
Mon, Jan. 13, 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.
Wed, Jan. 8, 3:11 PM
- Skeptical about investing in mREITs until maybe another washout from another leg up in interest rates, one trader - eyeing the "sheer cheapness" of the sector and the wholesale selling of stocks with no regard to durations or NAV - can wait no longer. Investors, he/she says, stand to make a low-risk 20-30% over the next 12-24 months - much of it in cash dividends - even if rates do climb to 3.5-4%.
- His/her top pick is Ellington Residential (EARN +0.1%), managed by the same crack team who has been able to preserve book value so well at Ellington Financial (EFC +0.6%). The stock trades at a 16% discount to book, at 6.3x core EPS (earnings from interest, not cap gains), and has about a 5% exposure to higher rates - meaning a 100 bps rise in rates would ding book value by 5%, still putting the stock at just 89% of book.
- Should rates stabilize, the upside is 1x book value. Add in dividends and that's a 32% return in a year.
- Also getting a positive mention for preserving book value in a tough time is MFA Financial
- Related ETFs: REM, MORT, MORL
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.
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