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  • Can Sprint Break The AT&T/Verizon Duopoly? [View article]
    Remember that the legacy landlines are not such a bad thing and Sprint does have a big business there. If you mean "dial-up" service provider, then yes, that's a bad thing and they have very little exposure from what I can tell. But they have a ton of fiber and copper in the core of the internet and that is of huge value. I don't really know where they stand compared to V or T, does anyone?
    Oct 1, 2013. 11:22 AM | Likes Like |Link to Comment
  • Thermo Fisher Acquiring Life Technologies: Implication Of The Deal [View article]
    Oh, I strongly disagree. Personalized medicine should be a critical part of any valuation analysis! Mark my words - Celgene will dominate the drug space before the decade is out.

    Firstly, many of the resultant drugs are being fast tracked because they show preliminary efficacy and are being administered to patients living under death warrants. And many are showing surprisingly positive results. The FDA system is to make sure snake oil stays out of the medical field, not to hurt people.

    The advances coming from the biotech labs around the world are simply a culmination of years of genetic and epigenetic research. Sure, there is much we don't know and it's scary being on the bleeding edge, but lives are being saved and intractable diseases are being contained.

    As to LIFE, sure, most of the tools are for labs, but labs are where this is all happening. You don't need a sequencer to administer a remedy. You need it to discover a pathway or mode of action. That's the far front end of the personalized medicine process. The other thing is having a cancer patient determine of they have a gene that helps or hurts the metabolic action of another drug.

    Ion Torrent and Illumina have done some really great stuff and are selling tools that are allowing researchers and drug companies to stop cancer. What's not to value there?

    Yesterdays drug companies were based heavily on Chemistry, and that was the best we knew at the time. Today's drug companies rely on data analysis, biotechnology, chemistry and nanotechnology. They're light-years ahead in terms of understanding of action and metabolics. It's not even the same league, from a future value perspective.
    Sep 16, 2013. 09:41 PM | Likes Like |Link to Comment
  • Annaly Capital - Bargain Or Falling Knife? Questions You Must Ask [View article]
    As to "How will the Fed taper? It buys both treasury bonds and mortgage backed securities. Given concerns over rising mortgage rates killing housing demand, and the negative ramifications that would have for the banks and consumer spending, we suspect the Fed may cut back treasury bond buying more than MBS buying. Greater treasury bond supply means higher rates, right?"

    This is indeed the most important question because it's the one where we know the least. However, 1) I doubt that the fed worries about rates killing housing demand at this point in time, 2) correct me if I'm mistaken, but QE2 is about MBS only, and 3) again, I may be mistaken, but aren't bond supply and rates offered inversely proportional?
    Sep 9, 2013. 12:02 PM | 1 Like Like |Link to Comment
  • Annaly Capital - Where Do We Go From Here? [View article]
    It would depend on whether you were a trader or investor. For Traders, short term rules. Investors take a longer view. That said, you probably could have come out slightly better if you exited and reentered perfectly. In this case, however, market overreaction made that a risky gamble.
    Sep 9, 2013. 12:46 AM | 2 Likes Like |Link to Comment
  • Annaly Capital - Where Do We Go From Here? [View article]
    Prepayments move inversely to mortgage rates, as common sense would dictate. From May of 2011 until May of 2013, rates dropped and Prepayments rose, as you can see in the Mortgage Monitor or other statistics. Since June, the reverse has happened, except for a small abberation in July which is likely attributable to those waiting for the first bounce off the bottom. Since prepayments are clearly dropping, and should logically continue to do so, mREIT spreads should not be under pressure.
    Sep 9, 2013. 12:38 AM | Likes Like |Link to Comment
  • The Nokia Shorts Were Right All Along, And Fatally Wrong At The Same Time [View article]
    I am delighted to have my NOK investment rid of the D&S business. I think NSN is a stronger player than any of the others and am expecting significant share appreciation over time as NOK can focus more of it's attention to this far more lucrative market segment. The fact is that D&S got blindsided in a not-uncommon unwillingness to eat it's own lunch. Apple shot them in the heart and now Google is feasting on the carcass. The fact that Microsoft wants a bite is not unsurprising.

    While this must be an emotional blow to Finlanders, market dominance is something that must be earned every day, and I now see that Finland has a fresh step up to the plate. Sure beats being relegated to the minors.

    Let's go Finland! Let's make NSN the go to vendor in the NEP space!
    Sep 8, 2013. 10:40 PM | 6 Likes Like |Link to Comment
  • Insiders Are Buying Annaly Capital Management [View article]
    I like your article, but...

    Who are Capstead Mortgage, Impac Mortgage Holdings, and Redwood Trust? I would think that American Capital and Hatteras are better comparables and make for a firmer argument.

    Aug 22, 2013. 05:16 PM | 4 Likes Like |Link to Comment
  • Short Annaly: Expect More Capital Depreciation [View article]
    Here's something about eventual rraising of rates;_ylt=A2KJNF9NoBVSJlcA...
    Aug 22, 2013. 01:29 AM | Likes Like |Link to Comment
  • Short Annaly: Expect More Capital Depreciation [View article]
    Nope. Short interest has hardly changed over the past year.
    Aug 22, 2013. 01:17 AM | Likes Like |Link to Comment
  • Short Annaly: Expect More Capital Depreciation [View article]
    What does that have to do with Annaly?
    Aug 22, 2013. 01:11 AM | Likes Like |Link to Comment
  • Short Annaly: Expect More Capital Depreciation [View article]
    Frog, What you don't get is that REITs are about cashflow, not equity growth. Sure, the increase in rates will inversely effect the book value of the held mortgages, but the rise in rates plus the fixed nature of how they borrow means that spreads and dividends will explode until such a time as the fed raises the discount rate, something that's not even remotely on the table. So they will pay out more. Then, sooner or later, the market will adjust the book to reflect reality.

    Bond bears are simply reacting predictably to something they don't understand.

    Tell me honestly, do you think all this insider buying is misinformed?
    Aug 22, 2013. 01:09 AM | 1 Like Like |Link to Comment
  • Short Annaly: Expect More Capital Depreciation [View article]
    Hungry, you're spot on. Mortgages are going to get more expensive, but but the rates at the window won't be changing. Spreads will only rise. That's why Welly bought 30k shares on the open market on the 20th and when prices dropped a dime the next day (today) bought 150000 more, and left all her options alone (of course, they're underwater). Now lets wait and hear which idiots says she spent 2m of her own money to create a false impression.
    Aug 22, 2013. 12:55 AM | 1 Like Like |Link to Comment
  • Methodology For Assessing Sustainability Of Annaly's 13.4% Dividend Yield [View article]
    I fail to see why they would implode. While there is a spread, there will be arbitrage and there will ALWAYS be a market. For a flattening curve, Annaly has already demonstrated that they won't go too far out of the risk line, unlike their competitors.

    I agree, however, that this is a political fiasco, gratis George W and Barney Frank, two of the finest of the breed. Saying that the bankers were not opportunistically complicit, however, devalues the rest of your analysis.

    Look, my principal is down from where I bought, but my yield is still almost 9%, based on the higher principal. Would I have bought lower - Sure! Would I have waited to buy lower? Not a chance! Will it go lower still? Possibly! Will it go higher? I have no doubt at all. Does that really matter? Not to me. It's the dividend that I care about, and I see it going higher. This is an NPV deal through and through.
    Aug 16, 2013. 02:16 PM | Likes Like |Link to Comment
  • Annaly Capital: Risk To Future Dividend And Book Value Persist [View article]
    No, they'll back off at some point. They will have to. All the money out there will cause an even bigger bubble if it doesn't get sopped up. The FED has never had very good timing, but right now, all that excess liquidity is barely starting the economy, but when it does, it will zoom pretty fast, and they will have little choice but to pull back. I just hope they execute it well.

    Read Calculated Risk, He's not a genius, but he thinks very clearly and transparently. My favorite blog.
    Aug 15, 2013. 10:13 PM | Likes Like |Link to Comment
  • Annaly Capital: Risk To Future Dividend And Book Value Persist [View article]
    OK, So I'm lost a bit here and need further clarification.

    The Spread is the difference between what they borrow at and what they lend at. If that spread increases, they make more money. If they make more money, they pay a higher dividend (all things being equal). If they pay a higher dividend, the book value rises.

    Bond Prices move inversely to rates - that's a given, but that is due to the fact that face value is fixed.

    So what am I missing? Why would NLY book value plunge 5% if 'spreads widen' .15%? Are you saying that the value of the holdings drop when the rates those holdings yield rise?
    Aug 15, 2013. 10:02 PM | Likes Like |Link to Comment