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Annaly Capital Management, Inc. Message Board

  • bjspokanimal bjspokanimal Mar 21, 2013 1:32 PM Flag

    Long Term Interest Rates are Dropping Again

    I noticed today that the 30-year yield is down 10 basis points from both 1 week and 1 month ago.

    For the record, I've been acquiring NLY shares over the winter as I believe that the fed will ultimately phase out QE3 before the fed will allow the fed funds rate to rise.

    Still, given that spreads are narrowing now and likely to remain so over the near future, I believe NLY's share price surge has left the stock "over-bought", and I'm not likely to resume purchases of NLY until it's pre-ex-dividend price is back under $15.40 a share (or $14.95 ex-dividend).

    NLY is an excellent, contrarian play (low beta) in a high stock market, but I think that patient purchasers of this stock will get a better price once things settle down and the reality of the still-gentle-slope of the yield curve sinks in.


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    • NLY is also a stock in which future anticipated earnings and dividends affect current price. Consider benefits of CREXUS acquisition from both an incremental yield curve improvement, structural mgt changes which will reduce opex by $45mm, and a decrease in the loan payback percentage. With those, along w/an eventual fed exit from QE, I think a higher stock price is more likely. But sure, your right, not a rocket but rather a great conservative asset class.

      Sentiment: Buy

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