I missed the bottom at 82 but got in at 85, nice clean 15 pointer. The Nov-Dec bottom was 50, this one the buy the dip oil crowd got slammed with Chevron's divvy cut, so it didn't go below. This is a prime example of an ASCENDING TRIANGLE. You definitely want to play this, as DRIP makes new higher lows and higher highs, play the cycle. OIL is crashing, SUPER CONTANGO, so is the stock markets, everything, Shorting is your only safe way to invest, short everything on "HAPPY TALK" "FED WON"T HIKE ANYMORE", "ECONOMY IS TANKING RATES WILL DROP".......................................not a good bet.
RATES WILL RISE, stocks will fall, the wealth transfer will continue, lower highs lower lows, trade the cyclic movements. DRIP is going to be real nice.
TBT is looks very tempting, as the flight to safety is still on. This is only tradeable, nothing is buy and hold.
The celebrated Dr. K was recently spotted in an hospital oxygen tent receiving treatment...eg... DRIP intravenously (for oil hydration) ...and sedatives for the little tantrum he threw when he discovered that the entire nursing staff had come back with takeout from CMG. Even then, the staff was still being generous and offered to share with the good Dr. After waking up....(still groggy however)...he proceeded to mistakenly order a TBT on toast. An endoscopy is being preformed as we speak.
gracie, what you are not taking into effect is that Gary stated that AGNC is at there lowest amount of paper and has lots of room to ramp up there portfolio...That said IMO they will add say another $10 billion of mortgages and that in tern will add additional income and earnings to help pay the Div...IMO he does not want to reduce the Div. below the current .20 and actually wants to increase it during 2016...PS. you do nice work with your computations...
AGNC has like $6,000,000,000 billion of cash so they can buy 5 million shares if they want.
Book value = 20.5
trading at 14.00
6.5 / 14 = 46%
8 million share float.
That would be enough to put together a pipeline ETF which would then double over the next two years as the market quits punishing MLP's for oil prices. And pay a 10% dividend.
Was on the call and got all the info I needed. Here's the numbers (I've done this a few times in my past). MBS yield 2.60% and if you hedge the duration with 5yr swaps at 1.25% you are left with 1.35%. Lever that 5X and you get 6.75%, add in the 2.60% and you get 9.35% (there's your spread). Now let's check and see if that makes any sense. Multiply 9.35% times BV of $22.59 and you get $2.11, divide by 4 and you get $.53 per quarter in core earnings (Hey whaddya know almost to the penny). Now that assumes no compression in MBS yields to 5yr and a 0 bps Libor to MBS repo basis. Let's say we get 10bps in compression and 10bps in basis spread, that gets you to $.47 in core earnings and 25bps gets you to $.37 and a 6.6% yield on BV. So yes, there will always be spread, the question is there enough spread to justify the risk? I still like the preferreds below $24 better than the common. Just one man's, somewhat informed, opinion.
Yes, thanks. That explains the accumulatory volume.
For three years AGNC sold shares for above book on secondary offerings, In the last two years they are repurchased well below book.
gracie, If you were really that smart you would have been on the AGNC earnings Call Tuesday and asked Gary questions...If you spend 15 minutes and read the Earnings Transcript at the end there are several paragraphs where Gary speaks of AGNC is on the mend and 2016 could be pretty good as the Fed will not be raising rates any time soon because of the World's Economic Downtrend. Further, he stated that the spread is getting better and AGNC will continue to buy back shares aggressively this 1/4er which we saw yesterday with over 10 million shares traded. There will always be a spread on mortgages gracie.
Sentiment: Strong Buy