Yesterday, 12:01 PM
- Head of a desk trading mortgage-related debt at Citigroup (C -1.2%), Ilker Ertas has reportedly resigned this week to take up a position with mREIT giant Annaly Capital (NLY).
- Ertas' exit would follow the departure of Stefan D'Annibale - head of Treasury and agency trading - who joined a hedge fund, and the resignation of long-bond trader Joseph Leary.
Wed, Apr. 8, 2:48 PM
- Annaly Capital (NLY) is in a tough spot, say FBR Capital's Daniel Altscher and Cole Allen, downgrading the stock to Underperform from Market Perform, and taking the price target down $2 to $10. The dividend is at risk if short-term interest rates moves higher, they say, and the company is exposed to a prepayment wave should long-term rates slip a little lower.
- Despite the purchase of CreXus (thus giving Annaly commercial real estate exposure), "Annaly is still seen as the granddaddy of the agency mortgage REITs," says the team, putting it first in line for punishment on rate (higher or lower) fears.
- The only way Annaly wins from here, they say, would be if there's no real change in the rate curve, and even then, the duo prefers peers like Two Harbors (TWO +0.3%).
- Source: Barron's
- Previously: Annaly Capital slips after downgrade (April 8)
Wed, Apr. 8, 7:48 AM
Fri, Mar. 20, 11:01 AM| 15 Comments
Wed, Mar. 18, 2:30 PM
- Worries about a sharply flatter yield curve abate just a bit as the FOMC drops "patient" from its policy statement - putting rate hikes on the table at subsequent meetings - but Fed economic projections send a dovish signal, with outlooks for economic growth, inflation, and the pace of rate hikes all cut from previous estimates.
- Outperforming the averages: Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.5%), Two Harbors (TWO +1.5%), CYS Investments (CYS +2%), Invesco (IVR +1.7%), Hatteras (HTS +1.7%), Capstead (CMO +2.1%), MFA Financial (MFA +1.7%), Anworth (ANH +2.2%), Dynex (DX +1.5%), Five Oaks (OAKS +3.3%).
- ETFs: REM, MORT, MORL
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
Tue, Mar. 17, 4:13 PM
Tue, Mar. 10, 3:08 PM
- With the averages having a tightening tantrum - the Dow down nearly 300 - money is cautiously flowing into some income plays, notably the REITs. The iShares U.S. Real Estate ETF (NYSEARCA:IYR) is flat on the session.
- Among the larger caps: Simon Property (SPG +0.2%), General Growth (GGP +0.7%), Health Care REIT (HCN +0.9%), HCP (HCP +0.4%), Equity Residential (EQR +0.5%), AvalonBay (AVB +0.6%), Boston Properties (BXP +0.2%), American Capital Agency (AGNC +0.2%), Annaly Capital (NLY -0.8%)
- ETFs: IYR, VNQ, DRN, URE, SRS, ICF, SCHH, RWR, KBWY, DRV, REK, FRI, FTY, PSR, WREI, FREL
- Previously: Yields tumble alongside stocks (March 10)
Fri, Mar. 6, 10:21 AM
- The 10-year Treasury yield has popped all the way to 2.24% (up 11 bps on the session) following the strong jobs report which saw 295K jobs added in February and the unemployment rate dropping to 5.5%.
- Checking short-term interest rate futures, they're falling (meaning higher rates), but still not pricing in a rate hike until late summer.
- Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -1%), Armour (ARR -0.9%), Invesco (IVR -0.9%), CYS Investments (CYS -1.4%), Hatteras (HTS -1.1%), MFA Financial (MFA -1.1%), Western Asset (WMC -0.7%), Dynex (DX -1.2%), AG Mortgage (MITT -1.5%), Ellington Residential (EARN -1.1%).
- ETFs: REM, MORT, MORL
- Previously: Dollar and Treasury yields spike after strong jobs print (March 6)
Wed, Feb. 25, 12:32 PM
- GIven both the level of interest rates and the flatness of the yield curve, says Annaly Capital (NLY +0.7%) CEO Wellington Denahan, Annaly (and mortgage investors in general) would benefit more from an earnings standpoint than what it would lose from a book value standpoint were rates to move higher.
- Earnings call webcast and quarterly supplement (page 20 shows the estimated NAV changes based on rate an MBS spread changes).
- Previously: Annaly book value up 1.8% in Q4, selling at 18.7% discount (Feb. 24)
Tue, Feb. 24, 4:15 PM
- Q4 core earnings of $289.9M or $0.30 per share vs. $308.6M and $0.31 in Q3. Dividend is $0.30.
- Book value per share of $13.10 vs. $12.87 at the end of Q3. Today's close of $10.65 is a whopping 18.7% discount to book.
- Net interest margin of 1.56% slips five basis points from last quarter. Weighted average CPR of 8% vs. 9%.
- Agency MBS holdings of $82.9B up a hair from Q3. Commercial real estate debt and preferred equity of $1.5B down a hair from Q3, and commercial real estate of $210M vs. $73.8M a quarter ago.
- Conference call tomorrow at 9 ET
- Previously: Annaly Capital Management misses by $0.01 (Feb. 24)
- NLY flat after hours
Tue, Feb. 24, 4:07 PM
Mon, Feb. 23, 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%).
Mon, Feb. 2, 4:48 PM
Mon, Feb. 2, 12:16 PM
- Non-agency REITs likely fared best in Q4 says the team as credit assets outperformed and were in less need of hedging against higher rates. Two of note are outperform-rated Apollo Residential Mortgage Trust (AMTG -1.2%) and neutral-rated MFA Financial (MFA -1.7%).
- Agency players, however, were more likely to have positioned themselves for higher rates and should see more limited boosts in book value. Two of note are Annaly Capital (NLY -1.3%) and Western Asset Management (WMC -0.1%) - both neutral-rated.
- "While the Q4 rally in rates likely drove BVs higher than we previously assumed, in our view it only forestalls the drag from rising rates on future book value," says JPMorgan, cutting price targets on Annaly, American Capital Agency (AGNC -1%), Two Harbors (TWO -1%), Apollo Residential, and Western Asset.
- Capstead Mortgage already reported its Q4 and results were uninspiring (book value actually slipped a bit).
- Up after the bell tonight is American Capital Agency.
- Previously: Credit Suisse downgrades three mortgage REITs (Feb. 2)
- ETFs: REM, MORT, MORL
Wed, Jan. 28, 4:05 PM
- The iShares Barclays MBS Bond Fund (MBB +0.2%) hit a new lifetime high, which should be good for the book values of mortgage REITs (assuming they weren't too hedged), but the yield curve continues to sharply flatten. The 10-year Treasury yield is all the way down to 1.71% and the 30-year at a record-low 2.29% - this as the Fed says it's on track for a mid-year rate hike.
- In addition to shaving margins for leveraged holders of mortgages, the lower rates could result in another refinance wave, and thus a surge in prepayments.
- Annaly Capital (NLY -1%), American Capital Agency (AGNC -1.6%), Armour Residential (ARR -0.7%), Hatteras Financial (HTS -0.7%), Western Asset (WMC -2.2%), Apollo Residential (AMTG -0.7%)
- ETFs: REM, MORT, MORL
- Previously: Bond yields slide after FOMC (Jan. 28)
- Previously: FOMC: Still "patient," but rate hike remains on the way (Jan. 28)
NLY vs. ETF Alternatives
Annaly Capital Management Inc is a mortgage REIT company. The Company owns a portfolio of real estate related investments, including mortgage pass-through certificates, collateralized mortgage obligations, agency callable debentures & other securities.
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