Update: Javelin Opts To Change Portfolio CompositionAH Research • Today, 11:04 AM
- Allocation to agency MBS portfolio has been reduced by almost $282 million.
- Allocation to non-agency portfolio has been increased by almost 7%.
- Increasing non-agency investment is encouraging as it offers the highest weighted average coupon.
Update: How I'm Looking At Recent Insider Trading At Javelin Mortgage
- Javelin Mortgage has just filed two Form 4s with the Securities and Exchange Commission to report recent insider trading.
- When I last addressed insider transactions at Javelin, I had highlighted the buying as a reason I liked this company but didn't see new buying coming after the dividend cut.
- The insider buying is certainly a bullish sign, and let’s face it, this stock could use it, but I'm maintaining a hold rating.
- Defensive approach pressurized core EPS, which eventually resulted in a $0.03 reduction in monthly dividends.
- JMI continues to offer competitive dividend yield and potential for price appreciation.
- Management needs to give up defensive approach to ensure continuation of dividends.
Update: Downgrading Javelin Mortgage After The Recent Dividend News
- Javelin Mortgage Investment has just announced its upcoming dividend payments for the next quarter.
- As predicted the dividend was unable to be sustained.
- I have to downgrade the stock.
Update: Javelin Mortgage Reports Q3 Results - Not Great But Kept Pace With Competitors
- Javelin Mortgage has just reported its third-quarter results and it saw some quarter-over-quarter weakness as a result of the way interest rates moved and didn't cover its dividend.
- I previously opined that Javelin Mortgage would keep pace with its competitors in Q3 and that it would cover its dividend.
- Although the quarter was so-so, it kept pace with competitors, but I am now more neutral on the stock than I was in the past.
Update: Javelin Mortgage Announces Dividends - I Told You Not To Panic
- Javelin Mortgage Investment has just announced its upcoming monthly dividend payments for the next quarter maintaining its $0.15 payout.
- Last week I urged investors not to panic over the sell-off in JMI shares and felt the dividend would be maintained if the quarter was strong.
- The present news strengthens my thesis on the company and shares continue to be on a rare sale now yielding 15.05%.
Stop Panicking Over Javelin Mortgage - It Clearly Just Went On A Rare Sale
- I address concerns from readers regarding Javelin's sell-off this month, some of which may have stemmed from my prior article.
- Shares are down on no news; I detail exactly why shares are on sale.
- If you liked this stock a month ago when shares were trading at a premium to book value, then you have to love shares here, trading at a rare discount.
Javelin Mortgage Should Keep Pace With Its Competitors In Q3... And It Needs To
- Javelin mortgage outperformed my top mREIT holdings and main competitors Annaly and American Capital in recent quarters.
- Javelin underperformed its competitors badly in Q2.
- Javelin's interest rate spread narrowed, earnings declined and book value was stagnant.
- Javelin failed to cover the dividend.
- Recent underperformance may be an anomaly stemming from after effects of its portfolio rebalancing efforts.
Update: Javelin Mortgage Investment's Second Quarter Earnings Impact
- Javelin Mortgage released Q2 earnings and reported core taxable REIT income of $4.9 million of $0.41 per share.
- This is in-line with most expectations, although slightly worse than my prediction for performance for the company I made to start the year.
- Shareholder equity was $161 million or $13.40 per common share, a 1% premium to the current price of $13.27.
- The stock sold off hard following the report, but has since begun to rebound.
- Currently the dividend is safe, but Javelin came in $0.04 per share shy of complete coverage.
Yesterday, 4:54 PM
- A sizable jump in non-agency holdings has brought that amount up to nearly equal with agency holdings, according to a just-released slide deck from Javelin Mortgage (NYSE:JMI).
- Two years ago, non-agency holdings made up just about 30% of the portfolio, and about one year ago, non-agencies made up more than 50% of the portfolio, so things do move around.
- Not surprising given the big drop in rates, but January has seen a sizable jump in the CPR on its agency portfolio to 7.1 from 4.8 in December.
Wed, Jan. 7, 12:52 PM| 1 Comment
Tue, Jan. 6, 2:17 PM
- The 10-year yield has plunged all the way down to 1.94% and one would figure on some nice increases in book value for the mortgage REITs (REM -0.1%), but on the flip side are narrowing interest rate spreads (especially as the Fed still seems to be intent on hiking short rates), and what hedging losses the companies are taking.
- Other ETFs: MORT, MORL
- Individual names: Annaly Capital (NLY +0.4%), American Capital Agency (AGNC), Armour Residential (ARR -1%), CYS Investments (CYS -0.2%), Invesco Mortgage (IVZ -2.7%), New York Mortgage Trust (NYMT -0.5%), Hatteras Financial (HTS -0.3%), Western Asset Mortgage (WMC -2.7%), Ellington Residential (EARN -0.4%), Javelin Mortgage (JMI -3%).
Dec. 30, 2014, 12:37 PM
- Nearly all the mREITs sell at discounts to their most recently disclosed book value, with sector giants Annaly Mortgage (NYSE:NLY) and American Capital Agency (NASDAQ:AGNC) trading at double-digit discounts.
- Often a sizable haircut to book may make sense, as in the case of Armour Residential (NYSE:ARR) and Javelin Mortgage (NYSE:JMI), both of which just cut their dividend (they have the same external manager).
- Of the 24 companies examined, New York Mortgage Trust (NASDAQ:NYMT) and Capstead Mortgage (NYSE:CMO) stand alone in trading at premiums to book value.
- The full list
Dec. 23, 2014, 7:28 AM
Nov. 5, 2014, 10:36 AM
- Javelin Mortgage (JMI -0.5%) had a big run higher late last year as is stepped up the pace of share repurchases to fend off an activist shareholder.
- The strong move, however, left the stock trading at a premium to book value - a rarity in the mREIT sector - and it's struggled this year (-10%) while most of its sector brethren rallied.
- Q3 results earlier this week showed a quarterly decline in book value and the stock - though no longer at a premium - sells (as of the time of the earnings release) at just a 1.9% discount to September 30 book.
- Thalman downgrades to Hold from Buy.
Nov. 3, 2014, 4:40 PM
- Q3 core income of $4.7M or $0.39 per share vs. $4.9M and $0.41 in Q2. Dividend is $0.45.
- Book value per share of $12.85 vs. $13.40 in Q2. Today's close of $12.61 is a 1.9% discount to book.
- Net interest margin of 1.62% down eight basis points from Q2.
- Average CPR on agency holdings of 6.56% rises from 4.77% in Q2.
- Leverage of 7.07:1 down from 7.67:1.
- About $288.6M of agency MBS sold during quarter, bringing agency holdings down to $917.2M from $1.2B. Non-agency holdings of $287.4M vs. $282M in Q2.
- Conference call tomorrow at 9 ET
- Previously: Javelin Mortgage Investment EPS of $0.39
- JMI flat after-hours
Nov. 3, 2014, 4:33 PM
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. 17, 2014, 2:51 PM
- Another $10B taper this month brings QE to just $5B monthly, an amount the FOMC expects to go down to zero with its next policy meeting. The "dots" shifted somewhat higher - meaning maybe a slightly earlier start to Fed rate hikes and a higher level of Fed Funds at the end of the next few years, with the median forecast being 2.9% at the end of 2016.
- Mortgage REITs (REM +0.2%) have been under pressure in the sessions ahead of the FOMC, and are mostly snoozing through today's news.
- Annaly (NLY -0.1%), American Capital Agency (AGNC +0.1%), CYS Investments (CYS +0.2%), New York Mortgage Trust (NYMT +0.5%), Dynex (DX +0.8%), Ellington Residential (EARN +1.2%), Javelin (JMI +1.3%).
- Previously: FOMC statement and projections lean hawkish
- Previously: Yellen press conference: Falling UE rate still masking labor market weakness
Aug. 5, 2014, 6:53 AM
- Core income of $4.9M or $0.41 per share vs. $5.7M and $0.48 in Q1. Dividend is $0.45.
- Book value per share of $13.40 vs. $13.38 in Q1. Last night's close of $13.26 is a 1% discount to book.
- Net interest margin of 1.7% slips 34 basis points.
- Average CPR on agency holdings of 4.77% up from 3.13%.
- Leverage of 7.67:1 down from 7.95:1. Portfolio relatively unchanged, with agency holdings of about $1.2B and non-agency of $282M.
- Previously: Javelin Mortgage Investment results
- JMI flat premarket
Aug. 4, 2014, 5:22 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.
Jul. 7, 2014, 7:35 AM| Comment!
Jun. 11, 2014, 4:52 PM
- Javelin's (JMI) latest slide deck shows agency mortgage holdings rising to 60.2% of the portfolio in June from 56.4% last month and 51.6% in April. Non-agency holdings have fallen to 39.8%. It's the highest allocation to agency/lowest allocation to non-agency since last October.
- The Constant Prepayment Rate (CPR) on the agency portfolio ticked up to 5% in June from 4.5% in May. 5% is the highest CPR since late last summer.
- The company reports a float of roughly 12M shares, the same as March 31. Prior the start of the buyback program late last year, the float was 13.5M shares. The stock of course, is no longer at a steep discount to book value, closing today at $13.98 vs. March 31 book of $13.38 - putting the shares at a premium of 1.04x book.
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