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AGNC, dividend reduced, price increases...
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2012 Feb 7, 12:53am 5,926 views 5 comments
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I've posted this before. The comment period is now over and the ball is in the SEC's court (PDF). The Commission solicits commenters’ views about the application of the Investment Company Act to mortgage-related pools, including suggestions on the steps that the Commission should take to provide greater clarity, consistency or regulatory certainty with respect to Section 3(c)(5)(C).
SFace, thanks for commenting. I'm into a couple of mREITs for small amounts. Leverage upon leverage; this will end badly. The question is when (and if the SEC curtails the party early)...
Income increased significantly but so have shares outstanding from capital raise.
...
FYI, I am selling.
...
AGNC today is a different beast than AGNC last year.
Thanks for that. Helpful info, and may push me over the edge on selling....I bought pretty low, so why not sell high?
SFace
2012 May 3, 1:35pm
LONG AGNC,
Spread expanded and portfolio value expanded and will likely expand further in 2012 which is obvious. Business conditions are favorable and fully leveraged. Best updside of any mReit
Fed fund rate will likely remain low through 2014 so I like AGNC in the short term.
* Spread will be around 2% - 2.2%
* Marketable security value held will go up.
* Fed funds rate still going nowhere soon.
Triple green!
It's especially a buy given what I expect to be a tougher summer. If you must hold some equities, this is it. And if you must hold mReit, AGNC is the one.
This is a remarkbly simple business model.
Borrow 1M for next to nothing (or raise capital)
buy $10M bucks worth of government back security and net 2%.
Margin = 200K.
Overhead virtually 0
Tax = 0, Cash Dividend 95%.
Thoughts on Green Mountain ("GMCR")
Any good dividend stock recommendations? is AGNC still a good buy til 2014?
Eman
2012 Oct 15, 6:15am
@Swebb,
I graciously bowed out and sold the remaining 700 shares of AGNC and 850 shares of IVR into the close today. It was fun and rewarding while lasted. All party will come to an end, right? Why? I believe their profit margin will get squeezed in the next several quarters, and the aggressive selling in the past week speaks volume. It was great that it bounced off its 200DMA. To me, any bounce is an opportunity to sell, not buy. I hope you can sell at $33.75 to $34 of the bounce this week.
At this point, I'm looking to deploy the money into stocks like T, MO or VZ. I will be doing some homework in the near future. Any stocks that you can recommend? :)
TIA.
I own a bit of AGNC. I was surprised today at the news and stock price movement.
"American Capital Agency Corp. (AGNC: News ) reported that its fourth-quarter net income increased to $208.71 million from $138.08 million last year. Earnings per share was $0.99 compared to $2.50 prior year.
Net spread income per share for the fourth-quarter of 2011 was $0.98. Comprehensive earnings per share for the quarter increased to $2.27 from $1.23 a year ago.
Net interest income was $262.82 million compared to $76.38 million last year."
I'm not sure how to read this. 4th quarter net income increased significantly (~50%). Earnings per share decreased significantly? (for the quarter, for the year?) Net spread income (what is this?), comprehensive EPS (what is this?) increased significantly compared to Q4 2010. Net interest income increased a bunch.
But the dividend was reduced significantly....and the price went up. I guess the decreased dividend was "priced in", but it caught me off guard, esp considering it has been steady for a long time. Makes me realize how "in the dark" I am. Anyone have any web resources where I could learn what all these things mean?