As an alternative, Goldman says hybrid mortgage REIT Two Harbors (TWO) “has better prospects to maintain its book value and dividend due to its nonagency exposure and potential for MSR acquisitions, and we rate it Neutral.”
NLY is down 1.8% to $9.87 early Thursday afternoon, while AGNC is down 1.7% to $19.42. TWO is down 0.6% at $9.01.
and it'll taste like #$%$...which is pretty much what it has turned out to be. Now that its cracked 9 i suspect it will continue to erode down below 8.9,...nut we'll see.
This is the best of the Mreits (if you expect the 10 year to be 3.5 by this time next year). Friday's jobs number will further drive rates higher.. assuming a strong number. So tapering cannot be that far away..
what matters is Asset Value, not share price plus NI Spread.
Rates are going up - or at least everyone thinks they are going up, so all Interest Rate sensitive stocks are going down (except banks!) - of all the mREITs Two is the most like a bank. It is the most likely to protect asset value and then be positioned best to earn the new higher spreads.
This is only phase one - curve steepening - long rates (Mortgages) going up, short rates fixed - i.e new money earns BIGGER spreads. Two has a good plan for this
Phase 2 is more difficult (2016 and beyond) - here we have a flattening as short rates go up and long rates hold still or go down! spreads tighten and returns get ugly. This the phase to worry about, but not yet.
TWO is the only mREIT to invest in at this time, and don't worry about share price. NAV is 10.35 and I would think that mgt has held that in the most part.
I got in around 9 in may/june of 2012...Kept buying into the mid 12's....But with a good div and reinvesting them..Ill just wait it out...
Sentiment: Strong Buy
of institutions and retail unloading all they can while TWO remains above $8. Tax loss selling has exasperated the situation.
Santa's got a big lump of coal for TWO this Christmas.
.................below BV and $9 is a good entry if it holds, good dividend payer but watch out for decreases in the dividend and BV. GLTYA
Vortecman, I am kind of thinking the same thing. Unless the mkt goes to hades in a hand basket this should be a good spot to pick up a few more shares. My big problem is I am in with 4k shares @ $10.00. Got to avg down to make this stock profitable. Let's look forward to an excellent 2014.
Two Harbors Investment Corp. (TWO) is one of the many battered mortgage real estate investment trusts (REITs) that were hit hard when interest rates started to rise last May. The Merrill Lynch analysts think that its diversified portfolio and move to a more defensive posture on rates makes it a top name to buy. Investors are paid an outstanding 11.86% dividend as well. The Merrill Lynch price target for the stock is $11, and the consensus was not posted. Two Harbors closed Friday at $9.44.
Sentiment: Strong Buy
I admit I was wrong about the $8s coming by the end of November. Today, we're just 7 pennies away from that reality.
Nothing has changed on my investment thesis here. Will start nibbling @ $8.90 and continue to munch down to $8.45.