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American Capital Agency

  • The Ups and Downs of the End of QE3

    By Adam Levy - May 23, 2013 | Tickers: AGNC, NLY, CMO

    With the government buying $40 billion in mortgage-backed securities every month, in addition to $45 billion in long-term treasuries, QE3 continues to have a huge impact on mortgage REITs for the time being. Ending it could provide some short-term pain and long-term gain for two companies in particular - Annaly Capital Management (NYSE: NLY) and American Capital Agency (NASDAQ: AGNC).

    How close are we to the end?

    When Fed Chairman Ben more »

  • A Few Good Signs for mREITs

    By Adnan Khan - May 23, 2013 | Tickers: AGNC, NLY, IVR

    While the U.S. financial sector has been one of the top performers over the past one year, mortgage REITs have been in the red zone for quite some time now. One of the major reasons for this is the Fed’s aggressive bond buying and the prevailing ultra-low interest rate environment. Through this post, I will focus on some positive signs for managements and investors of mortgage REITs.

    Easing more »

  • Forget The Ugly Past And Look At The Bright Future For These Stocks

    By Adnan Khan - May 23, 2013 | Tickers: AGNC, NLY, ARR

    The latest weekly Mortgage Bankers Association survey is out with some sigh of relief for the pure-play mREITs. The survey reveals a hike in mortgage rates, supported by a decline in the refinance index. Therefore, you can expect the pure-play mortgage REITs like American Capital Agency (NASDAQ: AGNC), Annaly Capital Management (NYSE: NLY) and ARMOUR Residential (NYSE: ARR) to fly high as the trend continues. I recommend investors consider them more »

  • Could Now Be a Good Time to Buy mREITs?

    By Rupert Hargreaves - May 22, 2013 | Tickers: AGNC, NLY, TWO

    It has been well documented that the Fed's newest asset purchase program has depressed the yields on MBS, squeezing income for highly leveraged mREITs that rely on the interest spread between the interest they are paying on their borrowed money and interest received from MBS to generate income for shareholders.

    However, with rumors about the Fed's tapering of asset purchases starting to circulate, could now be the time more »

  • The Fed's Asset Purchases Continue to Hurt mREITs

    By Rupert Hargreaves - May 22, 2013 | Tickers: AGNC, ARR, CYS, HTS

    mREITs continue to feel the pressure as the Federal Reserve’s continual asset buying depresses the yields on their mortgage assets, squashing interest received by the companies, their net income, and investor returns.

    mREITs, or mortgage real estate investment trusts, work by borrowing money in order to purchase mortgage backed securities (MBS). The borrowing is usually in the form of a repurchase agreement (REPO) for which the company pays a more »

  • Hybrid mREIT Diversifies Further

    By Adnan Khan - May 22, 2013 | Tickers: AGNC, NLY, TWO

    Two Harbors (NYSE: TWO) is one of the hybrid REITs in the US, and has large investments in both Agency and non-Agency residential mortgage backed securities. Other financial assets form about 5% - 10% of its entire portfolio. The following chart display the current proportion of each security within its portfolio at the end of the first quarter.

    The company recently announced it is further diversifying its business and entering new more »

  • Two mREITs To Buy, One To Avoid

    By Adnan Khan - May 22, 2013 | Tickers: AGNC, NLY, ARR

    Mortgage REITs have remained a favorite investment vehicle for many investors’ for a very long time due to their elevated (double digit) dividend yields. Some of the most-followed REITs offer dividend yields in excess of 17%, while 10-year Treasuries are only offering 1.92%. However, these elevated dividend returns are not without elevated risk.

    mREITs have a complex business model. It is a model in which the management does not more »

  • Insiders Love These High Yielding Financial Stocks

    By Adnan Khan - May 21, 2013 | Tickers: AGNC, IRC, IVR

    The prevailing ultra low interest rate environment has left investors with little option to enhance their regular income. As a result of the Fed’s stimulus, fixed income security yields have dropped to their lowest. Therefore, stocks paying elevated dividends are the best alternatives these days. 

    You will find three such stocks from the U.S. financial sector that pay dividends in excess of 4.50% and are insiders’ favorites more »

  • Reasons To Buy This 17% Yielder

    By Adnan Khan - May 20, 2013 | Tickers: AGNC, NLY, ARR

    American Capital Agency’s (NASDAQ: AGNC) first quarter results caused a lot of concern amongst the investors. The markets began to price in a premature easing halt by the Fed. As a result, the mortgage rates started climbing up. This took a large chunk out of the book value of American Capital Agency causing investors to flee. However, investors don’t need to be worried anymore, as American Capital Agency more »

  • Mortgage Lessons of the Past Are Quickly Forgotten in This ETF

    By Jeff Stouffer - May 16, 2013 | Tickers: AGNC, NLY, MORT, MFA

    The ability to forget and repeat mistakes is well recorded in the history of humanity. Back in the hey-days of mortgage originations, the idea of pooling individual mortgage obligations and restructuring the payment streams to fit investor appetites seemed like a great way for a bank to free up its balance sheet and create new mortgages. History reminds us that the demand to produce such mortgage pools led us down more »

  • REIT Battle: AGNC v NLY

    By Daniel Murray - May 15, 2013 | Tickers: AGNC, NLY, REM, FTY, MORT

    A real estate investment trust is a company that owns, and in most cases operates, income-producing real estate. By law, REITs must distribute at least 90 percent of their taxable income to shareholders annually in the form of dividends, making them a popular choice for income investors.

    REITs come in a variety of flavors. There are REITs that specialize in retail space, health care facilities and even self-storage operations.

    One more »

  • American Capital Agency Presents a Buying Opportunity

    By Adnan Khan - May 14, 2013 | Tickers: AGNC, CMO, CYS

    Don't be fooled by the elevated dividend yields being offered by most of the mortgage REITs. These elevated returns are not without associated risk. American Capital Agency (NASDAQ: AGNC) is one of the few mREITs that have offered steady returns, and for this reason it has long been  an analyst favorite. The company was able to maintain its dividend rate during the third and fourth quarter of the prior more »

  • Another Story of Compressed Spreads and Book Value, But the Outlook is Brighter

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

    Annaly Capital Management (NYSE: NLY) reported yet another story of spread and book value compression. However, the outlook for the second quarter of the current year looks promising. The remaining of the investment thesis will discuss the latest financial disclosures and see which factors will lead the company to reported growth in the second quarter.

    Financial review

    While Annaly Capital reported EPS of $0.47, marginally above it’s $0 more »

  • Hybrid Mandate Gives This mREIT Better Upside

    By Adnan Khan - May 13, 2013 | Tickers: AGNC, MFA, TWO

    While Two Harbors (NYSE: TWO) missed its earnings estimate, it still appears to be best positioned to outmaneuver the current challenging macroeconomic environment, marked with accelerated Fed bond buying and the declining mortgage spreads. The remaining of the investment thesis will discuss Two Harbors' latest financial disclosures and see what competitive edge the company possesses.

    Portfolio diversification

    Two Harbors operates as a hybrid mortgage REIT in the US financial sector more »

  • The Underappreciated Risk in Mortgage REITs

    By Bob Chandler - May 9, 2013 | Tickers: AGNC, NLY, HTS

    Many investors have turned to mortgage real estate investment trusts (mREITs) to juice investment income. They seem to have exceptionally attractive dividend yields and are thought to be fairly safe. Some of the most popular are Annaly Capital Management (NYSE: NLY), American Capital Agency (NASDAQ: AGNC), and Hatteras Financial (NYSE: HTS). But shareholders need to remain alert; the same factors that make the dividends so appealing may also be increasing more »

  • mREITs Well Positioned for FSOC Themes

    By Adnan Khan - May 8, 2013 | Tickers: AGNC, NLY, ARR

    An article in The Wall Street Journal stated that mortgage REITs have come under the microscope as regulators worry that they pose a risk to the financial system. It was suggested back then that the Financial Stability Oversight Council (FSOC), which comprises some of the top U.S. financial regulators, will report the sector in its annual report.

    The annual report was released last week, providing a sigh of relief more »

  • How to Buy a Dollar for 95 Cents

    By Shmulik Karpf - May 2, 2013 | Tickers: AGNC, NLY, CIM

    In a zero percent interest rate environment, hungry-for-yield investors are willing to look into any security which offers them an extra percentage point in dividends. Often times, they are willing to settle for a low quality company just to get the stream of dividends that it offers. Usually, this turns out to be a bad investment decision and the investor ends up regretting his hunger for dividends in the first more »

  • Are Highly Leveraged Mortgage REITs the Next Target of a Witch Hunt?

    By Jeff Stouffer - April 27, 2013 | Tickers: AGNC, NLY, WMC

    The significant financial market downturn beginning in 2008 instilled a fear that has bred a constant vigil of heightened wariness. This feeling has caused many investment ideas to be targeted as the next source of market collapse.

    One sector that has recently gained this stigma is a subset of real estate investment trusts (REIT) that invest in mortgage obligations (mREIT), using borrowed funds to acquire and control large pools of more »

  • Headwinds for the mREITs

    By Adnan Khan - April 25, 2013 | Tickers: AGNC, NLY, CYS

    An article on Bloomberg reveals that the Fed might consider increasing the pace of its easing. This is in contrast to the debate among Fed members on the timing of a reduction in the bond buying program. While the increase in the pace of bond buying may be advantageous to the general economy in general, it has the potential to create headwinds for the US mortgage REITs. The remainder of more »

  • This mREIT Expands its Spread Despite Continued Fed's Easing

    By Adnan Khan - April 25, 2013 | Tickers: AGNC, CYS, HTS

    The earnings season has already kicked off and the mortgage REITs have started reporting their first quarter performance. First it was CYS Investments (NYSE: CYS) and now Hatteras Financial (NYSE: HTS). The remainder of the investment thesis aims to review the latest earnings of Hatteras Financial in light of the prevailing ultra low interest rate environment.

    Hatteras Financials

    Hatteras Financials reported earnings per share of $0.62 for the first more »

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