It matters because people see stability
go find a cef that pays 10 to 15% and pays it out of their capital - there are some of these.
how do they exist? provided they are disclosing this - they are basically legalized ponzi schemes. - shifting ownership from self to the public - why would the public buy it? because you arent the public who says it shouldnt matter - the public is a lazy person who sees stable yield and figures hey must be safe - bingo.
and they dont have to juice it big - just use it to stabilize when they are down a few pennies, but sometimes they might beat by a few pennies and so just keep it as it is and then people can base this off of yield relative to others
thats wmc problem right now - they arent sure about its stability
thats why cmo trades higher - consistency - not uti - but absent uti to stabilize they just do it with peeformance.
else why is agnc and nly trading at similar p/b when nly yields so much more
and if yo say cause nly is hybrid now with their credit exposure, then lets use mtge - same p/b but mtge yields 2% more???
there are disparities; but a consistent divi and money there to support it can maintain that appearance.
yeah but how can UTI really matter? it's just income that needs to be paid out of book value. So it's capital that's taken away from book and it's taxable because it's UTI... if you have no UTI but you CHOOSE to pay out of book with no UTI it's return of capital and thus reduces the investors cost basis in the shares and is not taxable on it's own.
oh and would anyone like to guess what the YoY Ec return is on ORC? It starts with a fifty and ends with a .56%
sure but then its a bigger discount and do they push that p/b discount up towards mitt
I just think mitt has tons of uti also and that's what seems to count also
agnc has maybe 7 cents left when they used to have tons and that would add stability for the same old same old divi - over and over back in the day
if they do raise to 0.50, they might get to a 0.94 p/b you are correct. So AMTG has value and if you buy the value you can be rewarded if they raise or just move closer inline with sector.
Well... 0.52 vs 0.42 is OK because that means 0.10 gets put into book value every quarter.. after 4 quarters that's an extra 0.40 to book value. It's nothing to cry about.
I think its more because they are just paying out close to all they are earning
example last quarter they earned .60 and divi was .60 and quarter before was close to same - but uti means they can miss or beat by a few pennies and keep it the same
amtg on the other hand earn .52 and only paying .42
so they are covering easily this divi but if not paying it seems others just don't want to reward them
p/b near .84 stale and mitt .94
until amtg signals things are stronger by raising the divi to .45 to .50 then they will lag.
Much better yield because it has more agencies than AMTG and thus more rate risk. But credit can go up in value in a different way and book value growth could pick up materially even if rates go up from here as long as it's for economic reasons.
If mitt can get back to book.. AMTG can too! Mtge and Agnc are too heavily focused on agency to reach book value... Investors hate rate risk right now.
Loaded with subprime floaters and less rate sensitivity... Plenty of upside to be had at 84c on the dollar. Dividend increased last quarter... Might see further increases down the road. NAV appreciation likely to continue given housing fundamentals..
alkkov, I dunno how you find the time to dig into all these but its always worth reading. I am always ready to take profits and will be when and if it gets there.
thanks. Be vigilant, illiquidity cuts both ways. If it gets 40-50c above par prior to ex (9/26), I'd sell half.. or more than half. I don't like what they did today.. Purchasing a couple properties from their own affiliate fund and taking on debt to do so. There really is no way to give them the benefit of the doubt, as they are retail properties and IMO the prospects for retail centers are not that great.. to put things lightly.. For tenants, if they get a grocery store, HD, Lowes, or any other non-clothing related chain.. good great grand. If they get a Mattress Firm, BedBath, JCP (heh), or whatever.. bad. 2 out of 3, as stated.. are located adjacent to a "Food Lion" grocery store.. so that throws out the prospect of a grocer. As of today.. I think about .325c is accrued.. So at par, it's technically worth 25.325.
I also wonder what rate type of rate they got on their borrowings.. Yes type.. fixed or floating.. Also the debt is most likely senior to the preferred. bad if they have the rate on borrowings exceed their cap rate.
great call there alkkov, both accounts doing well with this. The common is breaking out today and bringing the preferred with it.
DONT REALLY PLAY IT
JUST GOBBLED A LITTLE ON THE OFFERRING
AND OUT FOR 5 TO 6 CENTS