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Adnan Khan

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  • Buy These mREITs Amid QE Unwinding

    By Adnan Khan - June 18, 2013 | Tickers: AGNC, NLY

    The already under pressure Agency mortgage REITs sector came under more pressure after the Financial Times reported the QE3 tapering is likely to be signaled by the Fed. The release of recent encouraging macroeconomic data related to the US labor markets and retail sales left whether the Fed might take it as a signal of improving macroeconomic conditions and so it did. However, the markets seem to be reluctant to more »

  • Are These Banks Well Suited For Rising Interest Rates?

    By Adnan Khan - June 18, 2013 | Tickers: PNC, STI, USB

    Some of the regional banks in the US emerged stronger after the 2008 financial meltdown. However, as the unwinding of QE unfolds, these banks might be faced with increased volatility in the interest rates coupled with higher interest rates. While higher interest rates mean higher returns on loans, they also tend to hinder loan growth. The first quarter was marked with higher interest rates. Let’s see how US Bancorp more »

  • Building 14.5% Yields With mREITs

    By Adnan Khan - June 17, 2013 | Tickers: NLY, MFA, WMC

    Given ultra-low interest rates and the lack of high-yielding fixed income instruments for income oriented investors, I have constructed a portfolio that yields 14.5%, in addition to the upside potential being offered by each stock within the portfolio.

    The three stocks considered in the portfolio are mortgage Real Estate Investment Trusts (mREITS), which are considered highly complex corporate structures. Therefore, investors must look at their future potential, particularly in more »

  • What Does the Dividend Hike For This Agency mREIT Mean?

    By Adnan Khan - June 17, 2013 | Tickers: AGNC, NLY, ARR, CYS

    CYS Investments (NYSE: CYS) hiked its quarterly dividend in  the second quarter of the current year. Given the challenging macroeconomic situation that mREITs are currently facing, the correct interpretation of the hike in CYS Investments dividends is important. Let’s see where did the hike come from and what is does it mean for other Agency mREITs.

    The company

    CYS Investments has a fairly simple policy of investing in residential more »

  • Dividend Upsets in Mortgage REITs

    By Adnan Khan - June 15, 2013 | Tickers: CMO, CYS, TWO

    The mortgage REITs sector witnessed a rally late last week with all the major mREITs posting gains. While the stock market rally was partially the reason why the mREITs were lit up in green, the dividend announcements by some of the mREITs were the primary reason. I believe the rally will be short lived, and investors should look at the future approach of each of the mREITs before making an more »

  • Mortgage REITs Rallied, But Why?

    By Adnan Khan - June 15, 2013 | Tickers: AGNC, NLY, ARR, JMI

    Stocks snapped a losing streak late last week with a big rally after the release of a series of positive data, including encouraging jobless claims and upbeat retail sales. The data also overshadowed fears about growth in Japan. The mortgage REITs sector also rallied as measured by a 4.8% rally in the sector's ETF. However, the mREITs sector had its own reasons for the rally.

    Annaly Capital Management more »

  • Profits To Return At These Mortgage Insurers Despite Increased Competition

    By Adnan Khan - June 15, 2013 | Tickers: AIG, MTG, RDN

    The US housing markets have shown considerable improvement with the help of the governments stimulus programs. As a result, I believe the mortgage insurance giants like Radian Group (NYSE: RDN) and MGIC Investment (NYSE: MTG) will post strong results in the coming quarters. Bloomberg reports Standard & Poor’s expects these stocks to report the return of profits after a long time.

    Fears of insolvency

    Analysts at S&P believe that more »

  • This mREIT Is Best Suited for the Current Interest Rate Scenario

    By Adnan Khan - June 14, 2013 | Tickers: AGNC, NLY, CMO

    Given the volatility in the Agency MBS markets, I prefer the hybrids over pure-play mREITs. Within the hybrids, Two Harbors remains my favored mREIT. However, this article will feature another category of mortgage REITs that are considered relatively safer than the pure-play mREITs. Let’s explore this category of mREITs and see why they are safe, give the current volatility in the interest rates.

    The safer mREIT category

    There are more »

  • American Capital's Approach for the Future

    By Adnan Khan - June 14, 2013 | Tickers: AGNC, NLY, ARR

    In a recent article, I ranked American Capital Agency (NASDAQ: AGNC) as one of my least preferred pure-play mREITs. The reason was largely the composition of its investment portfolio that was constructed in a way in which the company would benefit if rates declined and vice versa. Further, I believe it provides little book value protection. Earlier this week American Capital Agency presented at the Morgan Stanley Financial Conference and more »

  • Higher Rates Mean Higher Returns for These Banks

    By Adnan Khan - June 14, 2013 | Tickers: JPM, USB, WFC

    Increased volatility and higher interest rates have caused headaches for many banking companies. However, that is not the case for JPMorgan Chase (NYSE: JPM), despite its woes. I believe these banks will benefit from the prevailing interest rate environment. Let’s see how.

    Higher yields mean additional returns

    The banking industry is highly reliant on interest rates as a source of income. However, banks have little control over the interest more »

  • What Makes mREITs Inappropriate for Retail Investors?

    By Adnan Khan - June 14, 2013 | Tickers: AGNC, NLY

    mREITs are the most favored alternative for fixed income instruments, given that 10-year Treasuries are offering only little above 2%. Money managers and sophisticated traders own only a negligible part of the mREITs now. Since mREITs operate under a complex business model, retail investors must understand that they will be in the direct line of fire in the event that the sector experiences rapid losses. Let’s see what makes more »

  • What Puts Tesla Ahead of Other Automaker Giants?

    By Adnan Khan - June 13, 2013 | Tickers: F, GM, TSLA

    The future of electric cars is still not certain. However, the future of one electric car manufacturer is, and that is Tesla Motors (NASDAQ: TSLA). The company has improved its financial situation over the past and is ahead of the competition. Let's see what puts Tesla ahead of other automaker giants.

    The company

    Tesla Motors is a specialty electric car and component manufacturer. The manufacturer of electric cars is more »

  • Hybrids vs Pure-Play mREITs

    By Adnan Khan - June 12, 2013 | Tickers: NLY, ARR, TWO

    The key to the mortgage REIT sector right now is the preservation of book value. Given the relative strength of the non-Agency MBS market, hybrid mREITs have been able to withstand the volatility of the market better. Therefore, this protection of book value leaves the hybrid mREITs in a better position to continue to deliver returns and potentially take advantage of the better spread environment on Agency MBS today than more »

  • A Weak Revenue Environment Is Not a Problem for These Banks

    By Adnan Khan - June 12, 2013 | Tickers: C, JPM, USB

    Large cap banks might continue to face headwinds as far as their revenues are concerned due to sluggish growth in loans. However, I'll focus on any signs of improvement and try to differentiate between the banks. I believe, given the revenue challenged environment, banks which are able to contain their expenses and grow their top lines with the help of loans growth are best positioned.

    I believe Citigroup (NYSE: Cmore »)

  • Sustainable Dividends From This 20.6% Yielding mREIT

    By Adnan Khan - June 12, 2013 | Tickers: AGNC, NLY, WMC

    The Fed’s confused signals have sent the stock prices of many mortgage REITs plunging down. As a result, their dividend yields have increased significantly. Western Asset Mortgage Capital (NYSE: WMC) is currently offering a dividend yield of 20.6%. Yes, this is extremely attractive for retail investors who are looking to enhance their regular incomes. However, before individual investors invest, they should look at the sustainability of the dividend more »

  • Banks Will See More Profits

    By Adnan Khan - June 12, 2013 | Tickers: BAC, C, JPM

    According to the Wall Street Journal, the U.S. banking industry posted record profits at the end of the first quarter. The record profits are a signal to the industry’s recovery after the 2008 financial crisis. However, the Federal Deposit Insurance Corp does not support the thesis. It believes the banking recovery is still hampered by a stubbornly low interest rate environment, coupled with a weak demand for loans more »

  • 3 Ways to Play the Housing Recovery

    By Adnan Khan - June 11, 2013 | Tickers: KBH, SPF, WFC

    Fed’s aggressive bond buying is showing some results as the U.S. housing markets begin their recovery. Amid this recovery, I have shortlisted some companies that have significant exposure to the U.S. housing market. I believe these companies are poised to benefit from the housing recovery. Therefore, these stocks are the best way to play the U.S. housing recovery.

    The rebounding housing market

    U.S. housing is more »

  • Is Visa Winning the Battle?

    By Adnan Khan - June 11, 2013 | Tickers: DFS, MA, V | Editor's Choice

    During the recent Investor Day conference hosted by Visa (NYSE: V), the company’s management shed some light on its emerging and developed market strategies. Also, some time was dedicated to its upcoming mobile and innovative strategies. Management once again demonstrated its resolve on building stronger relationships with its customers to help drive sales volume. Therefore, I am bullish on the stock.

    Growing the pie

    Visa is already considered to more »

  • Insiders Buying Doesn't Always Mean The Same Thing

    By Adnan Khan - June 10, 2013 | Tickers: ARR, JMI, MFA

    Promising growth potential of the company’s business model sometimes leads insiders to increase their stakes in the company. However, the same is not true every time an insider makes a purchase. I don't agree with the insiders at MFA Financial (NYSE: MFA), ARMOUR Residential (NYSE: ARR) and JAVELIN Mortgage Investment (NYSE: JMI). I feel these companies offer little growth potential in the coming future. Therefore, it’s important more »

  • A Few Reasons to Buy This 10% Yielder

    By Adnan Khan - June 10, 2013 | Tickers: IVR, JMI, MFA

    Mortgage REITs’ investors have witnessed a bloodbath since Ben Bernanke sent confusing signals of a possible Fed tapering before the end of this year. While the entire sector is down since the start of the second quarter, I have reasons to believe MFA Financial (NYSE: MFA) has a better shot than its peers. Let’s see why?

    The edge

    MFA Financial operates as a hybrid mortgage REIT with investments in more »

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