ZagnZig

Annaly Capital Management, Inc. Q1 2008 Earnings Call Transcript

Thanks for your post - I understand what you mean concerning interpretations - especially in light of the housing inventory overhang.

Has any body considered the following?
CNBC is discussing FNM, FRE, the implication of the Fed's move and what they both have become now. What I would like to consider is:

1) What is Freddie Mac?

Freddie Mac is a stockholder – owned corporation chartered by Congress to increase the supply of funds that mortgage lenders, such as commercial banks, mortgage bankers, savings institutions and credit unions, can make available to homebuyers and multifamily investors.

Imagine NLY integrating itself into the mechanisms of these "owned corporations chartered by Congress"...and becoming a integral part of the overall operation. Any chance they could carve out 'indispensable' niche? Or, as I suspect, NLY is one of a great man players and just too easily replaced?

Thanks to all,

Annaly Capital Management, Inc. Q1 2008 Earnings Call Transcript

Sorry jjason to hear that you lost on this investment, we all know how it feels. Do you feel the 16mil paid in mgt fees was excessive? But jjason, the opening statement made perfect sense....the financial markets have never seen anything like the melt down we just experienced. Hence the Twilight Zone analogy.

And what about this: The FNM earnings news out today - can you believe how bad it was? This news is only going to help NLY by keeping the fear factor high and the spreads from closing anytime soon. There is a story out that 40% of the sold homes in Calif. are foreclosures - I suspect higher in Nevada and Arizona probably too! Fear is NLY's cost of funding greatest ally - no?

CFO4Nova - I wonder, if given the dislocation we have experienced ~ that NLY doesn't become a de facto instrument in any possible new market structure that is being formed. I think there are fair odds that NLY rises significantly as the market figures it out. Any thought?

Annaly Capital Clicking on All Cylinders

May 1: NLY: S&P MAINTAINS BUY RECOMMENDATION ON SHARES OF NLY. Q1 EPS of $0.53 vs. $0.29 tops our $0.47 forecast. Interest rate spread grew 88 bps from a year ago, to 1.46%, and we see further expansion as NLY benefits from recent Fed rate cuts. We remain impressed that NLY has delivered nine straight quarters of EPS expansion in a challenging credit environment, while reducing overall leverage. We continue to look for earnings and dividend growth in '08, on wider spreads and growth at its FIDAC taxable REIT subsidiary. We raise our '08 EPS estimate to $2.40 from $2.24, keep '09 at $2.94, and maintain our $18 target price. NLY yields 11.5%.|

Annaly Capital Clicking on All Cylinders

Great thanks - I had figured 0.54 - lets see what they declare.

On March 07, 2008, Greg Feirman wrote:
“Thornburg is heavily leveraged and its large portfolio of mortgage backed securities is financed by debt. If it has to pay all that debt back immediately, it will have to sell large parts of its portfolio at fire sale prices in order to meet its obligations, resulting in massive losses.”

Is it reasonable to assume that Thornburg did have to sell large parts of its portfolio at fire sale prices?
Is it possible that NLY was able to take advance of the fire sale prices since NLY was not pressed by margin calls?

Annaly Capital Clicking on All Cylinders

1Q Net Interest Income $253.5M Vs $69.4M
1Q Net Soars To $243M From $67.4M
1Q EPS 53c Vs EPS 28c
1Q Core Earnings 51c Vs 26c
1Q 2008 Core EPS Of $0.51, An Increase Of 96% From Prior Yr
and 38% From Prior Qtr
Sold $4.1B In Mortgage-Backed Secs In 1Q For $9.4M Gain

The best part of the earnings announcement was CEO Farrell’s statement concerning the current volatile financial environment: “we expect operating fundamentals to remain favorable for us...”
Performance – I guess that is why FIDAC charged 6mil instead of their usual 5.
From all of this – any guess as to what the dividend will be ?

Annaly Capital Clicking on All Cylinders

I just received my nice NLY dividend yesterday! This is one of the sweetest stocks on NYSE, IMHO. I also think dis stock is climbing into the $17-18$ - any bets? All the best of luck.