AGNC's 3.6x P/E: New Dot Plot May Be The Turning Point

Summary

  • AGNC Investment Corp. has been facing valuation compression and profitability headwinds lately.
  • The new dot plot released by the Federal Reserve suggests potential rate cuts, creating potential tailwinds for AGNC.
  • At the same time, the degree of the yield curve inversion has lessened.
  • And I expect this to be beneficial for AGNC too, as it makes money on the spread between long-term and short-term rates.
  • I do much more than just articles at Envision Early Retirement: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Decision to change direction in business, finance, career or education. Decision to renounce or retract. Pencil draws a turning point arrow line on white background.

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AGNC's valuation compression

AGNC Investment Corp. (NASDAQ:AGNC) has been under tremendous pressure lately. The thesis of this article is to analyze why the new dot plot could be a turning point. In the remainder of this article, I

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This article was written by

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Sensor Unlimited is an economist by training with a PhD, with a focus on financial economics. She is a quantitative modeler and for the past decade she has been covering the mortgage market, commercial market, and the banking industry. She writes about asset allocation and ETFs, particularly those related to the overall market, bonds, banking and financial sectors, and housing markets.

Sensor Unlimited contributes to the investing group Envision Early Retirement which is led by Sensor Unlimited. They offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request. Learn More.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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