Tue, Sep 2, 2014, 1:12 AM EDT - U.S. Markets open in 8 hrs 18 mins

Recent

% | $
Quotes you view appear here for quick access.

Annaly Capital Management, Inc. Message Board

  • batraa batraa Dec 20, 2004 10:52 AM Flag

    anticipate short covering soon

    14mm shares short here.
    NLY continues to deliver good dividends and i believe there will be short covering as the dividend didn't decline.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • 2000 was a good year to be invested in CMO's. many GNMA funds were up about 10% because of the overall drop in interest rates and declines in stocks. A year like 1994 would be much harder on NLY.

    • I agree. I don't own it yet because it hasn't been out long but it's on my watch list.

    • excellent idea.

      I would (and i bet alot of HF managers) are putting this trade on in some fashion.

      Buy the preferreds at 8% yield and sell short the stock at 10% yield. For 2% a year you get all the upside of a stock drop.

      Re: Not suggesting a default=cashtrash
      by: tdsnumbers 12/22/04 01:55 am
      Msg: 22480 of 22481

      Also, consider the NLY Preferred A. Cumulative dividends, $25 Par, yields 8%, and is backed by $1.5 billion in common equity in addition to the mortgage backed AAA rated portfolio. NLY would have to be losing lots of money before they would defer the preferred dividend

    • If you are looking to capture a yield close to that of NLY, but want to minimize risk to investment, consider a recent preferred stock offering by American Home Mortgage (AHM), which issued at class B preferred, redeemable in five years, paying 9.25%, for $25.00 a share. I bought some for my self-directed 401K a few days ago. From the perspective of a mid forties investor, building cash flow is starting to look better and better.

    • Also, consider the NLY Preferred A. Cumulative dividends, $25 Par, yields 8%, and is backed by $1.5 billion in common equity in addition to the mortgage backed AAA rated portfolio. NLY would have to be losing lots of money before they would defer the preferred dividend.

    • My point was that in the least advantageous circumstances, a prolonged inverted yield curve, NLY was able to make a respectable profit. $1.18 is certainly not what I am hoping for, nor expecting, but it is not catastrophic either. Even at today's price of $20.35, that is a yield of 5.8% which is better than CD's, Treasuries, or agency bonds.

      I don't know of anything high yielding and no risk. That's why, in my opinion, nobody should venture into stocks or mutual funds without a solid foundation of cash and individual government-backed bonds.

    • If I'm reading the chart correctly it appears that NLY was trading at around $8 back in 2000. Thank God interest rates fell so abruptly later in 2000, but at $21 that seems like a steep price to pay with such dramatic downside.

    • Mr. Short:

      You never answered my question!! Six days to ex-dividend date! Are you going to cover or pay the dividend??

      Waiting for the sky to fall seems about as exciting as watching paint dry.

    • I assume you are in earnest and are really interested in how NLY can make a profit even as the interest rate spread narrows. Take a look at 2000, the worst year for NLY, when earnings fell to $1.18.

      The first day of trading, Jan. 3:
      2-yr:6.38......10-yr:6.58....spread:.20

      The last day of trading, Dec. 29:
      2-yr:5.11......10-yr:5.12....spread:.01

      At times during the year, the yield curve was actually inverted but NLY still made a decent profit.

      The use of 2-year and 10-year benchmarks is arbitrary, of course, since Annaly's obligations are much shorter than 2 years. During the third quarter, the average duration was 109 days, for instance.

      Historical yields are taken from:
      http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yi
      eld.html

    • i guess sarcasim (sp) doesn't work well over message boards...

      BUT my point still holds - they have made money in all types of environments and hence the stock will not decline.

      by the time folks think about selling their shares it will be too late. And this event could never happen.




      Re: Not suggesting a default=cashtrash
      by: cashistrash 12/21/04 05:51 pm
      Msg: 22470 of 22472

      They borrow short and lend long. You can't tell me that they will make money in any interest rate environment.

    • View More Messages
 
NLY
11.90+0.05(+0.42%)Aug 29 4:00 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.
Exelixis, Inc.
NasdaqGSFri, Aug 29, 2014 4:00 PM EDT
Splunk, Inc.
NasdaqGSFri, Aug 29, 2014 4:00 PM EDT