In Q2 AGNC paid 37M in managment fees, a 4M increase vs Q1. MTGE will do the same. Big revenue increases for ACAS based upon AGNC and MTGE Q1 secondaries. This will certainly propel NOI and significantly increase ACAM's valuation. Annualized, this could be better than 20M in recurring revenue. How much more would you value a business that started paying you 20M more a year?
I cannot remember when this stock sold off like it has in the last couple of sessions prior to Earnings release. Obviously the Market has jitters about the company's earnings. I also believe if AGNC's earnings were such a big boost for ACAS then why no action in after hours? It doesn't sound to me like the company's earnings are going to be anything to write home about. Just my humble opinion.
Lets see, 20M MORE a year, 290M shares. 6.8c per share. I am less interested in what that does to NOI than NAV. Lets see ... 170M profit from AGNC + MTGE annualy. One would need to buy 6.8 Billion $ of 10-year bonds to get that income. Oh wait the assets that guarantee that payment are bonds.
The AGNC report has been very nicely received in the after-market: at 4:34 AGNC was up $1.31 and at 4:37 MTGE was up $0.92 (MTGE reports tomorrow). The fact that the world is not ending has been nicely received. This news is extremely good for ACAS. However, I would not annualize the results for ACAS. Additional share sales for AGNC and MTGE will not be coming for awhile--until the market price shows a nice premium above book value. This is likely to take some time.
AGNC and MTGE do not need not need to conduct additional share sales to maintain those payments to ACAS. They are due irrespective. Additional secondaries of common are not looking promising right now, so potentially this income will stop growing for the time being. They are looking to sell preferred shares however, and I believe we would see fee income increase based off that, albeit a small increase.
Moving forward, improvements in ACAS PE assets and ECAS will become the more substantial driver of NAV increases.