mREITs: A Smart Buy In This Environment? [View article]
This is the worst article ever written on Mortgage reits..I had a good laugh about the part where the author said "At least one mREIT, CYS Investments (CYS), seems to be in a lot of trouble here. CYS Investments lost $7.46 billion from operations as of September 30th. That figure almost equaled the $7.47 billion CYS made from financing. CYS Investments is on very shaky ground. Hatteras is definitely in good shape when you compare to it CYS." He/she couldn't be more wrong in saying that. CYS never lost any money since the 2007 issue when it used to invest in nonagency paper. It's been generating strong returns, as seen from the increases in NAV since 2009 AND strong dividends.
7% Month Return With CYS Investments Catalysts [View article]
Thank you for the article. I was hoping it would get enough hits to maybe help support the share price. I sold my last 20,000 shares of CYS this morning at $13.00. I am so glad to be out. I used the proceeds of exiting my CYS position, all 45,000 shares I had owned I sold over the last 2 days. $12.88 X 25000, and $13.00 X 20000... to sell the MTGE $25 dec puts for 0.55. MTGE is best of breed. CYS, the ceo, they don't seem to me to know what they are talking about. They apparently had to be convinced that the buying back of shares was even worth it. On the conference call the CEO was way wrong about even that issue. He said buying back shares would not make sense unless the share price was at a 50% discount or greater. He said it had to do with the ROE over say a 5 year time period and that that ROE would be better then repurchases. WELL HELLO, buying back shares below book increases the NAV and it increases the EPS by leveraging the remaining shares. Less shares = more gains or losses on capital and more earnings to be distributed among less shares. CYS also does not have anywhere near the amount of hedges that MTGE and AGNC have. The lack of hedges has caused material change negatively to the value of their assets. The new NAV is probably closer to $13.30 if you factor out the 0.45 dividend I expect them to declare. For this reason, i highly recommend anyone owning shares to consider selling them immediately and reinvesting the proceeds into mtge by selling the $25 dec put contracts that expire before MTGE goes ex-dividend. (based on all historical data the ex is always after OPEX)
An Economic Shocker Is In The Cards This Week [View article]
Momentum is name of the game. Period. Mtge and efc are buys in this sector, non agency selection and allocation is key to safe keeping book value and enhancing overall returns. Agency mbs dropping this fast is not normal in any situation, i expect the drop to reverse at least half of the losses.
Answer to fox: The same folks who bid $13.65 will increase the bid or watch icahn do a recap which is better then selling out at $13.65. Anyone who wanted to sell at $13.65 has already sold at higher prices in the market, the holders now all will vote down the offer and they want a better offer... if they dont get it.. recap time. If recap fails and no other bidders.. DELL goes to single digits, icahn might go in there and buy up as much as he can and then try to push the recap with a higher level of control. But Michael knows where all these roads go.. so i think there is a 90% chance of a higher offer but the market believes there is more than 60% chance of a higher offer right now. FOX - short at your own risk.. but don't cry when the $17 bid comes across your screen.
icahn is going to get some folks on the board, they already have enough votes to stop the buyout at $13.65, there is no way its going through at $13.65. Michael needs to up the bid to $16-$19 to get this deal through. The IRR to these new buyers is north of 20%, even at $15. So... to get icahn out of the picture and muster enough votes they will have to increase the bid. Forget $13.65, there is a stub price of $13.81 and a special $9 dividend if icahn pulls his plan through. That's a 67% premium to the $13.65 offer. Good enough for me.
Yeah, dell sucks so bad that Michael dell wants to buy it. yeah, its impossible to turn dell around right? Yeah, because all the activist investors would let it fall to $8-$10 without buying up the company and selling it for pieces? ya okay... sure.. sure... Michael would love to scare investors into selling at $13.65, what a joke. You can make a special dividend out of this of $10 a share!!! If it falls below $10 I am buying more calls, I just went long $14 calls on Dell today. 50 contracts.
mREITs: A Smart Buy In This Environment? [View article]
"After all, mREITs' ability to generate profit is based upon sale of a product, mortgage backed securities, that is highly vulnerable to the political situation."
Also wrong. The profit is a function of the spread between the cost of funds and the yield from the agency mbs. Thus if your cost of funds net of hedge is 1.5% and assets yield 3%, than net profit spread is 1.5% on the total assets. Another function of profitability is the increase of NAV from the appreciation of Agency MBS assets. Falling interest rates will increase the NAV significantly.
Prospect Capital: Buy This 12% Yielder With Record Originations [View article]
I'm 26 years old, individual investor... Long 48,000 shares of PSEC @ 10.97, just purchased last week. No plans to reduce position unless we see a multiple of 1.08x book or higher.
Dell (DELL) gains 2.1% AH on word Blackstone may be part of a group mulling a bid for the company. The P-E firm is among those who signed a non-disclosure agreement earlier this month, allowing it to get a close look at Dell's books. [View news story]
After reading your article Dan and further inspecting DELL i decided to go long the may $14 calls at 0.45 today. 50 contracts to start, wish i bought more.they will probably double 2morrow... i'll hang in there for the higher bid though.
Are you implying that Michael Dell is about to do something illegal to manipulate the share price more than he may or may not be already doing? Somehow I don't think Michael wants to go to jail, either way, icahn is going to do what icahn wants and he doesnt want to lose money on this. Either raise the bid or let icahn recap the company. Michael and his cronies need to figure out which they will do, because anything less and icahn already has threatened years of litigation if his idea is not put on the proxy.
Yep delusional, must be. Definitely delusional.. Icahn must be delusional too for buying up over 8% of the common and counting at prices above $13.65. We must all be delusional. I appreciate the bear case for DELL, but you fail to realize that michael DELL doesn't want to see his company on the chopping block and they need to increase the bid. My belief is we will see a $17 bid. If it doesn't happen.. thats okay, because i bought calls.. not the stock.. so my loss is limited to the premium.also, icahn is going to get his plan on the proxy too, so people can vote for it.. if it passes $22 is possible.. michael doesnt want that to happen so he will up the bid with his buddies.
A double-take is necessary to believe some of the handles in the mREIT sector, undergoing another savage selloff as the Fed hints at even more QE. The pure-agency REITs - in direct competition with the Fed for paper - are hit hardest. AGNC -3.4%, ARR -8.1%, CMO -4.9%, WMC -7.1%, to name a few. [View news story]
Takeaways from Gary’s presentation: (AGNC's today)
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
They're calling it the "DeMarco Trade," and it's nailing mortgage REITs (at least those who focus on Agency paper) already stung by vanishing interest spreads. Agency MBS paper has been falling in price since the election, as Ed DeMarco's days as FHFA chief seem numbered, paving the way for principal forgiveness, "the mother of all pre-payment waves." [View news story]
Takeaways from Gary’s presentation: (AGNC's TODAY)
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
mREITs: A Smart Buy In This Environment? [View article]
With Its Recent Price Decline, Prospect Capital Is On Sale [View article]
7% Month Return With CYS Investments Catalysts [View article]
An Economic Shocker Is In The Cards This Week [View article]
Dell: Take The Premium And Run [View article]
Dell: Take The Premium And Run [View article]
Dell: Take The Premium And Run [View article]
mREITs: A Smart Buy In This Environment? [View article]
Also wrong. The profit is a function of the spread between the cost of funds and the yield from the agency mbs. Thus if your cost of funds net of hedge is 1.5% and assets yield 3%, than net profit spread is 1.5% on the total assets. Another function of profitability is the increase of NAV from the appreciation of Agency MBS assets. Falling interest rates will increase the NAV significantly.
Prospect Capital: Buy This 12% Yielder With Record Originations [View article]
Dell (DELL) gains 2.1% AH on word Blackstone may be part of a group mulling a bid for the company. The P-E firm is among those who signed a non-disclosure agreement earlier this month, allowing it to get a close look at Dell's books. [View news story]
Dell: Take The Premium And Run [View article]
Dell: Take The Premium And Run [View article]
Dell: Take The Premium And Run [View article]
A double-take is necessary to believe some of the handles in the mREIT sector, undergoing another savage selloff as the Fed hints at even more QE. The pure-agency REITs - in direct competition with the Fed for paper - are hit hardest. AGNC -3.4%, ARR -8.1%, CMO -4.9%, WMC -7.1%, to name a few. [View news story]
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
They're calling it the "DeMarco Trade," and it's nailing mortgage REITs (at least those who focus on Agency paper) already stung by vanishing interest spreads. Agency MBS paper has been falling in price since the election, as Ed DeMarco's days as FHFA chief seem numbered, paving the way for principal forgiveness, "the mother of all pre-payment waves." [View news story]
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.