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moishep

moishep
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  • Waste Management: 1 Solid Long Term Buy [View article]
    ote-

    Why will you like WM better when competing income-generators become more competitive?
    Oct 10, 2013. 01:19 PM | Likes Like |Link to Comment
  • Continued panicky action grips the mortgage REIT sector (REM -3.5%) at the open as the global stock selloff as yet offers no relief on interest rates. Adding to the fear is an opening print of -25% on the Market Vectors Mortgage REIT ETF (MORT -3.7%). American Capital (AGNC -4.5%), (MTGE -2.6%), Annaly (NLY -2.8%), Armour (ARR -4.8%), Invesco (IVR -4.4%), Hatteras (HTS -3.9%), CYS Investments (CYS -3.6%). Set for release from embargo tomorrow is SA Pro's REIT Analyst arguing the selloff in AGNC has left the price about 20% below book value. [View news story]
    A few months ago, when exuberance over AGNC was rampant, I suggested that being 18% above book value was unsustainable. Being 15%+ under book value is also unsustainable.
    Jun 24, 2013. 02:34 PM | Likes Like |Link to Comment
  • American Capital Agency (AGNC -0.7%) is getting no pressure from its lenders to reduce leverage in light of the decline in mortgage prices, says CIO Gary Kain, responding to a question at the Morgan Stanley conference (webcast) (slides). If anything, he says, AGNC has room to take up leverage to an even higher level (it averaged 8.2x in Q1). Previous: The presentation discloses book value loss in Q2 through June 7 is similar to that of Q1. [View news story]
    Amen, Illola. Way too many unknowns make this a crapshoot.
    Jun 13, 2013. 06:22 PM | Likes Like |Link to Comment
  • MLPs are staging a bit of a recovery today after several days of losses amid rising interest rates, with key drivers Enterprise Products Partners (EPD +1.9%) and Kinder Morgan Partners (KMP +1.8%) showing the way. But as the move in longer yields was only about 60 basis points, 24/7's Jon Ogg shudders to think what could happen to MLP pricing if rates rose 150 or 250 bps. [View news story]
    The rollover in MLP's did not correlate directly with the move in yields. The move has had more to do with fear of the Fed "tapering".
    Jun 6, 2013. 02:54 PM | Likes Like |Link to Comment
  • AT&T (T -5.4%) gets slammed as 3 downgrades arrive in response to its Q1 revenue miss, the result of soft wireless subscriber adds and declining wireline revenue. There might also be concerns about whether lowering 2014/2015 capex targets (to fuel more buybacks?) is a bright idea in light of flagging growth. AT&T's 296K Q1 postpaid net adds (boosted by tablets) and 184K prepaid net losses are easily worse than Verizon's respective net adds of 677K and 43K. On the earnings call, AT&T mostly blamed wireline weakness on macro and government issues, rather than legacy voice service declines. VZ -1.9%. CTL -4%. WIN -2.2%. FTR -1.1%[View news story]
    These downgrades almost always provide great buying opportunities. I've wanted to add to my T position, but I've been waiting for a market selloff. Not waiting any longer.
    Apr 24, 2013. 11:40 AM | 2 Likes Like |Link to Comment
  • A check of mortgage REITs as the Fed looks to continue banging away at their net interest spread: Among the pure-agency REITs, HTS, which slashed its dividend last night, -2.3%. Also, AGNC -1.2%, but NLY +0.8%. The non-agency players mostly fare better, DX -0.1%, IVR -0.3%, EFC -0.1%[View news story]
    I agree, Pablomike. The only issue here is that between quarters, you don't know exactly what securities they're holding and what there value is. We only learn that quarterly.
    Dec 16, 2012. 12:07 PM | Likes Like |Link to Comment
  • A check of mortgage REITs as the Fed looks to continue banging away at their net interest spread: Among the pure-agency REITs, HTS, which slashed its dividend last night, -2.3%. Also, AGNC -1.2%, but NLY +0.8%. The non-agency players mostly fare better, DX -0.1%, IVR -0.3%, EFC -0.1%[View news story]
    Pablomike
    mReits are, indeed, traded every day, but net book value (and spread) is only made available to the public by each company once every quarter.
    Dec 15, 2012. 03:56 PM | Likes Like |Link to Comment
  • A check of mortgage REITs as the Fed looks to continue banging away at their net interest spread: Among the pure-agency REITs, HTS, which slashed its dividend last night, -2.3%. Also, AGNC -1.2%, but NLY +0.8%. The non-agency players mostly fare better, DX -0.1%, IVR -0.3%, EFC -0.1%[View news story]
    Re being one quarter behind in book value:
    AGNC's book value, on average, mostly bracketed around the 5% premium range. So, normally, book value was not something that one needed to be that concerned about, since it was almost always the same. It's only been "aberrant" since late September, when it spiked up to an 18% premium that BV became a concern to me. Up until then, my answer to you as to whether one is always a quarter behind would have been "no", since it was almost always about the same. At that point, I was able to look into a rear view mirror, see that the premium was way above normal, and decide to sell. My crystal ball, however, is not nearly as effective as my rear view mirror, and we'll have to see if book values for some of these mReits stabilize again for a reasonable period of time. At this point, however, there are so many moving parts involved in determining the valuation of this group, that there are going to be many more things impacting the group than as been the case for the last couple of years. They are, among others, the wide swings in BV, the decreasing spreads (at least for now, but maybe that trend is now stable), the repayment rate, which has been excellent, on balance, for AGNC, the Fed's ongoing purchases of agency paper, and the dividend tax issue, which does not really apply to mReits, but the pubic perception is that a dividend is a dividend, even though distributions from mReits are actually quite different. Hope this helps.
    Dec 15, 2012. 03:54 PM | Likes Like |Link to Comment
  • A check of mortgage REITs as the Fed looks to continue banging away at their net interest spread: Among the pure-agency REITs, HTS, which slashed its dividend last night, -2.3%. Also, AGNC -1.2%, but NLY +0.8%. The non-agency players mostly fare better, DX -0.1%, IVR -0.3%, EFC -0.1%[View news story]
    ka12345-

    There are 2 unknowns right now - the 2 most important for making mReit investment decisions. At this point, we only know what the book value and the spreads were for the 3rd quarter. I sold all of my AGNC when the premium to book value rose to 18%, and I felt that was not sustainable. Many on this thread disagreed, but it was not, in fact, sustainable, and it's now selling below 3rd quarter book value. Right now, there is no "current" book value available to investors - we'll have to wait until January or possibly early February, when AGNC and others announce book and spreads. So, for now, we don't know if AGNC (and others) is selling at book, below book, or above book. As of today, AGNC looks like a bargain, since it's selling below 3rd quarter book. But, book might have declined since, and it could actually be selling above book. Again, the other unknown is what the spreads have done since Q3, and my bet is that they're lower. To the point, I'm waiting for more information before I jump back in, although as it declines, I might begin to build a position, but no more than 5% at a time.
    Dec 14, 2012. 12:24 PM | Likes Like |Link to Comment
  • Beaten Down American Capital Agency Corp. Is A Buy With Its 16.43% Dividend [View article]
    Thanks for that, David. I agree that the stock has typically sold above BV. I took a look at the history of price/BV a couple of months ago. The premium had averaged around 5%, but it was trading at a premium of around 15%-18% at that time. I felt that this premium was unsustainable, and I sold all of my mReits at that time. I think that the problem now is that with all of the drama in this market, nobody really knows (a) what the spread is likely to be over the next couple of quarters, and (b) nobody knows what the BV will be. That has always been true, but one could at least reasonably project a trend. So, too many unknowns, and as always, neither the broader market nor we mReit holders (or ex holders in my case) like this much uncertainty. The distributions on many of the most popular mReits don't happen until January anyway, so for me, there's no hurry to jump back in until we have a modicum of clarity.
    Nov 14, 2012. 12:07 AM | 3 Likes Like |Link to Comment
  • Beaten Down American Capital Agency Corp. Is A Buy With Its 16.43% Dividend [View article]
    I'm having a hard time understanding how the increase in book value has added to the investment value of AGNC. Like most other investments, the basis is the return. In the case of AGNC, with the squeeze on spreads and the decrease in leverage, I can't imagine that the dividend is not going to be cut. At the very least, it is certainly suspect, so purchasing the stock at this point becomes speculation rather than a solid investment play. Book value, shmook value - if it doesn't result in an increase in the price of the stock or an increase in return, it's academic.
    Nov 13, 2012. 10:41 PM | 2 Likes Like |Link to Comment
  • Liquidation in mortgage REITs picks up where it left off on Friday, with nearly the entire sector lit up bright red. Leading today's decline is CYS Investments (CYS -4.6%) after being cut to hold at Wunderlich. No details are available, but presumably the analysts there read the papers: interest margins are declining and mortgage refinance activity (prepays) is on the rise. [View news story]
    Thomas Flaherty (see above) got it right. While it's true that even if the distribution of a stock such as AGNC goes from, say, 15% to 10%, it's still a terrific return in comparison with most alternatives, the market is not going to pay the same for a reliable 10% return as they will for a reliable 15% return. So, although you still have a superior return, you will have suffered a potentially significant hit to the value of your asset. AGNC and MTGE are still priced at a historically high price/book, which might be appropriate in an environment where book value is increasing (which it might or might not) and the dividend is safe (which it's probably not), but that's certainly not the case at this point in time. Both AGNC and MTGE normally sell for around a 5% premium to book, so they still have some room left underneath the current prices. The fact that we do not even know the Q3 book value makes simply adds to the speculative nature of holding either stock at these levels. It puts holding or buying these stocks into the "gambling" category. If book goes up, you win. If book stays the same or retreats, you lose. One would think that because of the Fed's buying spree, book would go up because the value of the paper would go up, but if these company's have increased their leverage, it could minimize that gain or eliminate it altogether.
    Oct 15, 2012. 07:02 PM | Likes Like |Link to Comment
  • Mortgage REITs continue to get repriced for lower yields going forward with earnings reports from JPMorgan and Wells Fargo not bringing good news. Both banks reported sliding net interest margins and booming mortgage business (some, if not most of which is refinancing) - an ugly combination for leveraged owners of MBS. [View news story]
    While the comments about continuing to own MReits due to their superior yield makes sense, why hold onto the ones that are selling at historically unsustainable price/book ratios, such as AGNC? Wouldn't one be better off waiting for these names to reprice and then move back in? When distributions are lowered, you'll have a much higher yield if you buy in at the more sustainable value than if you simply hang onto your current holdings, likely bought at the inflated price/book values. My guess is that AGNC will drop into a range that reflects a price/book of between zero and 5%. What's unknown at this point, of course, is "what is the current book value?" I would think that it's increased, but even if you factor that in, AGNC still has a couple of points to lose.
    Oct 12, 2012. 03:32 PM | 4 Likes Like |Link to Comment
  • "Our goose is cooked," writes a mortgage trader, imagining a conversation at the trading desk of a pure GSE mREIT like Annaly (NLY). With MBS prices bid to all-time highs (thank you Fed) and refinances on the way up, mREITs face an ugly combination of lower yields and higher prepays. One solution: Unload their MBS at these high prices - tell the staff to take a long vacation - and wait for Bernanke to exit. [View news story]
    As I mentioned in my comment of around a month ago, AGNC selling at a 15%+ premium to NBV is not sustainable.
    Oct 10, 2012. 04:54 PM | Likes Like |Link to Comment
  • "Our goose is cooked," writes a mortgage trader, imagining a conversation at the trading desk of a pure GSE mREIT like Annaly (NLY). With MBS prices bid to all-time highs (thank you Fed) and refinances on the way up, mREITs face an ugly combination of lower yields and higher prepays. One solution: Unload their MBS at these high prices - tell the staff to take a long vacation - and wait for Bernanke to exit. [View news story]
    As I mentioned in my comments of a month or so ago, AGNC sellling at a premium of 15%+ over NBV is not sustainable.
    Oct 10, 2012. 04:52 PM | 2 Likes Like |Link to Comment
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