Wed, Apr. 29, 4:14 PM
- Q1 net spread and dollar roll income of $0.49 per share doesn't include $0.08 per share in net servicing loss. Income was $0.68 in Q4, $0.67 in Q3. Dividend is $0.50.
- Book value per share of $22 vs. $21.91 at the start of the year. Today's close of $17.70 is almost a 20% discount to book.
- Economic return - change in book value plus the dividend - for the quarter of 2.7%, or 11% annualized.
- CPR on agency holdings of 7.7% vs. 8% in Q4. Leverage of 4.5x vs. 4.6x.
- As with American Capital Agency, management has repositioned the portfolio to a more defensive posture.
- Servicing portfolio of about 65K loans with roughly $13B in UPB. Q1 servicing income of $11.8M, expenses of $16.1M.
- Conference call tomorrow at 11 ET
- Previously: American Capital Mortgage reports Q1 results (April 29)
- MTGE +0.3% premarket
Wed, Apr. 29, 4:03 PM
Wed, Apr. 29, 8:08 AM
- In the wake of lame earnings and a dividend cut at American Capital Agency (NASDAQ:AGNC), not to mention management's cautious stance going forward, UBS downgrades the stock to Sell from Neutral. Gary Kain's other mREIT vehicle, American Capital Mortgage (NASDAQ:MTGE), is cut to Neutral from Buy.
- Also downgraded is AGNC's partner at the top of the mREIT food chain - Annaly Capital (NYSE:NLY) to Sell from Neutral.
- AGNC -1% premarket after yesterday's 2.2% decline. MTGE -1.3%, NLY -0.8%.
- Previously: American Capital earnings call: Hunkering down (April 28)
- Previously: American Capital Agency income and book value slip in Q1 (April 27)
- Previously: American Capital Agency declares $0.20 dividend (April 27)
Fri, Mar. 20, 9:47 AM
- The company last night cut its quarterly dividend to $0.50 per share vs. $0.65 previously. It's enough for Wunderlich to throw in the towel on its Buy call, and the firm downgrades to Hold with price target cut to $18.50 from $21.50.
- The cut isn't a total surprise to Jason Stewart at Compass Point who downgraded the stock six weeks ago on worry that margin pressure had boosted the chances of a reduction in the dividend.
- The current price of $18.12 is a 17.3% discount to Dec. 31 book value.
- MTGE -1.7%
Thu, Mar. 19, 4:27 PM
Thu, Mar. 19, 4:17 PM| Comment!
Mon, Feb. 9, 7:36 AM
- "Core EPS beat our expectations, but the longer term outlook for growth in taxable income was muted in the current rate environment," says Compass Point's Jason Stewart, downgrading to Neutral from Buy. "We believe margin pressure and a lower contribution of dollar roll income pose a risk to core earnings power and increase the potential for a dividend cut in 2015."
- Stewart does say that investments in credit risk transfer securities and MSRs should ultimately result in a premium valuation vs. securities-only peers (MTGE currently trades for 85% of book value), but the time-period for these initiatives to scale up has lengthened from earlier expectations.
- MTGE -1.5% premarket
Wed, Feb. 4, 4:20 PM
- Q4 net spread and dollar roll income of $0.67 per share excludes negative $0.03 of estimated "catch-up" premium. In Q3, it was $0.68. Dividend is $0.65.
- Book value per share of $21.91 slips from $22.24 at end of Q3. Today's close of $18.63 is a 15% discount to book.
- Economic return - dividend plus gain/loss in book value - of 1.4%, or 5.8% annualized.
- CPR on agency holdings of 8% vs. 8.9% in Q3. CPR in January of 7.7%.
- Net interest spread of 2.24% down 10 basis points from Q3.
- $5.9B investment portfolio includes $4.4B of agency paper, $1.2B of non-agency. 4.6x "at-risk" leverage.
- Servicing portfolio of about 66K residential mortgage loans with $14B UPB. Company booked a loss of $0.09 per share during quarter (not included in headline income number).
- Conference call tomorrow at 11 ET
- Previously: American Capital Mortgage beats by $0.01 (Feb. 4)
- MTGE flat after hours
Wed, Feb. 4, 4:03 PM
Tue, Feb. 3, 5:35 PM
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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%).
Wed, Jan. 14, 1:17 PM
- Agency MBS are off to their worst start relative to Treasurys since 1997 as the big drop in interest rates has investors nervous about a surge in refinancing. Returns on paper backed by Fannie, Freddie, or Ginnie Mae are 60 basis points less than those on Treasurys of similar duration so far this month.
- Also stoking the trend are changes to government programs aimed at making mortgage credit easier to obtain.
- Earlier today, the MBA reported applications for home-loan refis jumped 66% last week.
- Prices of agency MBS currently average 106.5 cents on the dollar, meaning owners would lose 6.5% if immediately repaid.
- Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -1.2%), Armour Residential (ARR -2%), Two Harbors (TWO -0.9%), Invesco Mortgage (IVR -1.9%), American Capital Mortgage (MTGE -1.3%), Dynex (DX -0.5%), Apollo Residential (AMTG -1.2%), Anworth (ANH -0.9%), Western Asset (WMC -1.6%).
- ETFs: REM, MORT, MORL
Mon, Jan. 12, 10:03 AM
- The mortgage REIT space (REM -0.6%) is cut to Market Weight from Overweight at Wells Fargo, with Annaly Capital (NLY -0.4%), American Capital Agency (AGNC -0.2%), CYS Investments (CYS -0.7%), Capstead Mortgage (CMO -0.8%), American Capital Mortgage (MTGE -0.5%), AG Mortgage (MITT -1.3%), and MFA Financial (MFA -0.3%) - for now - individual names also being cut to Market Weight.
- It's an interesting move, especially in light of the significant discounts to book value nearly every stock in the sector trades at. The mortgage REITs have been especially notable of late for not being able to make any headway alongside the big rally in bond prices. Lower rates might do something for book values, but the sharply flatter yield curve (which could flatten even more once the Fed begins hiking) doesn't bode well for earnings power.
- Other ETFs: MORT, MORL
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. 18, 2014, 4:04 PM
Dec. 9, 2014, 12:57 PM
- Unable to catch a bid for a few sessions, mortgage REITs (REM +1%) have turned higher in afternoon action, led by Annaly (NLY +0.7%) and American Capital Agency (AGNC +1.5%).
- Helping are jitters in the stock market (though U.S. averages are well off the lows), and a 10-year Treasury yield that's retreated all the way to 2.21% after hitting the mid-2.30s on the back of Friday's strong jobs number.
- Armour (ARR +1.1%), Two Harbors (TWO +0.9%), CYS Investments (CYS +1.4%), Invesco (IVR +1.8%), American Capital Mortgage (MTGE +1%), Hatteras Financial (HTS +2%), Capstead (CMO +2%).
- Other ETFs: MORT, MORL
- Also showing some green are the recently beaten-up BDCs, including Prospect Capital (PSEC +0.2%), Fifth Street Finance (FSC +0.2%), Ares Capital (ARCC +0.5%), FS Investment (FSIC), Triangle Capital (TCAP +1.7%).
- ETFs: BDCL, BDCS, BIZD
- Previously: Money flows back into fixed income (Dec. 9, 2014)
MTGE vs. ETF Alternatives
American Capital Mortgage Investment Corp operates as a REIT. It invests in, finance and manage a leveraged portfolio of mortgage-related investment, non-agency mortgage investments and other mortgage-related investments.
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