Nov. 3, 2014, 5:30 PM
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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. 30, 2014, 11:40 AM
- While the portfolio of non-agency MBS issued prior to 2008 has declined somewhat to $4.9B as of August 31 due to runoff and sales, MFA Financial (MFA -0.6%) has substantially boosted its holdings of MBS backed by re-performing/non-performing loans (RPL/NPL MBS) to $782M, says CEO Bill Gorin, presenting at the JPM Financial Securities Conference.
- The company is also now the owner of about $83M of re-performing residential whole loans (the actual loans, not the MBS).
- As for agency MBS, MFA hasn't purchased any since Q1 of this year.
- Presentation slides
Sep. 17, 2014, 3:49 PM
Sep. 16, 2014, 12:27 PM
- Residential mortgage REITs (REM +0.3%) have been under pressure ahead of the FOMC meeting as traders mull the possibility of higher short-term rates in the nearer-than-expected future, and FBR continues to see trading risks thanks a higher chance of something hawkish rather than anything dovish or unchanged coming from the Fed statement (has the FBR team seen the latest from Hilsenrath?).
- For those who want to buy the dip, FBR calls MFA Financial (MFA +1%) a "top choice" thanks to a portfolio comprised 65% of adjustable-rate mortgages.
- Also don't forgot that higher rates alongside an improving economy would be a boost to MFA's high-quality credit book.
- Commercial REITs are a different animal, says FBR, thanks to differences in how they're funded. The group is less susceptible to a rise in short-term rates, and FBR says Blackstone Mortgage Trust (BXMT +0.6%) should actually see improving earnings power alongside higher rates.
- ETFs: MORT, MORL
Aug. 4, 2014, 8:11 AM
- Net income available to common shareholders of $75M or $0.20 per share vs. $67.3M and $0.19 a year ago. Dividend is $0.20.
- Book value per share of $8.37 up from $8.20 in Q1 and compares to Friday close of $8.18, putting stock at 2.3% discount to book.
- Expansion of investment team allowed big boost to holdings of non-securitized re-performing/non-performing loans to $495.1M, and brought holdings of credit-sensitive residential whole loans to $59.7M. Sales of non-agency MBS for a realized gain of $7.9M.
- Conference call at 10 ET
- MFA flat premarket
- Previously: MFA Financial beats by $0.01, beats on revenue
Aug. 4, 2014, 8:02 AM
Aug. 3, 2014, 5:30 PM
Jul. 3, 2014, 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
Jun. 13, 2014, 10:20 AM
May. 1, 2014, 8:21 AM
- Net income of $72.4M or $0.20 per share is inline with the dividend. Book value per share of $8.20 rises from $8.06 after the payment of the $0.20 dividend. Last night's close of $7.93 is a 3.3% discount to book.
- Wide range of asset choices allowed management to boost yield on assets to 4.32% while cutting estimated effective duration to 0.83. Leverage remains at 2.9:1.
- Average LTV of mortgages underlying non-agency holdings is down to 82% (was 105% two years ago). Current loans underwater falls to 16% (was 52% two years ago). As a result MFA transfers another $35.9M from credit reserve to accretable discount, allowing boosted interest income over the life of the non-agency paper.
- Portfolio CPR of 11.71% falls from 13.42% in Q4.
- CC at 10 ET
- Source: Press Release
- Previously: MFA Financial beats by $0.01, misses on revenue
May. 1, 2014, 8:06 AM
Apr. 25, 2014, 4:43 AM
- The amount that lenders originated in mortgage loans plunged 58% on year Q1 to a 14-year low of $235B, almost entirely due to drop in refinancing. The figures are from industry newsletter Inside Mortgage Finance.
- Loans for acquisitions were flat on year and lower than in Q4.
- The trend is the latest indication that increasing interest rates are hampering the housing recovery. The average 30-year fixed-rate mortgage was 4.5% last week, up from 3.6% in May last year, when rates spiked after the Fed indicated it would scale back its QE program.
- Tickers: DHI, PHM, RYL, MHO, NVR, LEN, SPF, MDC, HOV, TOL ORI, NLY, AGNC, MTGE, ARR, TWO, IVR, CMO, MFA, WMC, FMCC, FNMA, RDN, NMIH, ESNT, GNW
- ETFs/ETNs: ITB, XHB, MORT, MORL, REM, MORT, MORT
Apr. 24, 2014, 10:36 AM
- A check of the mortgage REITs (REM +0.1%) finds not a lot going on stock price-wise following the first Q1 earnings reports from the sector this week (CYS Investments and Hatteras). As expected, book values grew and prepayments remained at a low level.
- Perhaps unexpected was a good deal of caution from CYS management about mortgage prices - right now, it's finding better value in Treasurys, and awaits a pullback in MBS prices before boosting those holdings. "The mortgage market is a little kid playing with matches," said CEO Kevin Grant on the earnings call (transcript). "We just don't know when everybody's fingers are going to get burnt. The traders that play in this market, they know this and they know they are playing with matches."
- Amid the low supply of MBS out there, Hatteras (HTS +0.1%) management on its call (transcript) says it now has 10 originators delivering wholesale product to the company covering more than half of monthly cash flow needs. Up next is expansion into jumbo ARMs.
- Other sector ETFs: MORT, MORL
- Individual names: Annaly (NLY +0.6%), American Capital (AGNC +0.7%), (MTGE +0.2%), Armour (ARR +0.1%), Two Harbors (TWO -0.6%), Invesco (IVR -0.1%), Capstead (CMO +0.3%), MFA Financial (MFA +0.1%), Western Asset (WMC +0.5%).
Apr. 10, 2014, 11:49 AM
- Lit up bright green as the market's momentum names again break down and lead the averages - and Treasury yields - lower are the mortgage REITs (REM +0.5%).
- The 10-year yield is off six basis points to 2.63% and Eurodollar futures in the last few sessions have rallied strongly, pricing out at least one rate hike between now and the end of 2016.
- CYS Investments (CYS +1.7%), Invesco Mortgage (IVR +1.3%), Hatteras Financial (HTS +1.3%), MFA Financial (MFA +1.4%), Two Harbors (TWO +0.8%), American Capital (AGNC +0.6%), (MTGE +0.5%).
- One day after making a number of additions to its management team - including a couple of hires from the New York Fed - Annaly (NLY +0.5%) is also posting gains.
- Related ETFs: MORT, MORL
Apr. 4, 2014, 3:15 PM
- What's working today? With the exception of Western Asset Mortgage which had a massive secondary offering, the mREIT sector is nearly universally higher as money rushes out of the previously perkier areas of the market.
- Not hurting is a seven basis point decline in the 10-year Treasury yield to 2.73%.
- Up the most are the two largest and also investor favorites Annaly (NLY +1.4%) and American Capital Agency (AGNC +1.3%). Others: CYS Investments (CYS +1%), American Capital Mortgage (MTGE +0.5%), MFA Financial (MFA +0.5%), Dynex (DX +0.9%), Armour (ARR +0.5%).
- Related ETFs: REM, MORT, MORL
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