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American Capital Mortgage Investment Corp. Message Board

  • sme20_98 sme20_98 Oct 31, 2012 4:14 PM Flag

    MTGE hits a Homerun

    Taxable earnings up tp $1.33, increases undistributed earnings by .43--no chance of a dividend decrease in the near term(1 to 2 years). BV explodes to over $25. Buyback to decrease stock volitility. Perfect stock to own for the next two years in my opinion.

    Sentiment: Strong Buy

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    • No complaints really, but I wonder about the percentage of non-agency securities vs agency. Isn't this a hybrid? It's still mostly agency. Shouldn't they be moving money into non-agency securities? Then, are they covering the dividend from the spread alone?? I mean, I like the increase in the value of their agency book, but it's still unrealized. Can you really sell and get the value? What do you do with the money? I guess all of this will be covered in the call. I am just wondering about the real difference between this stock and AGNC. I moved money from AGNC in this stock, but would like to see more non-agency. Any thoughts?

      • 3 Replies to jdb_1234
      • Can you say Flexibility as the so called housing recovers we can more fully participate in the recoverythru the non-agency paper.Goto to love MTGE

      • My guess is they wait(ed) until the agency securities appreciate bigtime, sell them at top dollar, then start investing the money in non-agency until the agency market becomes attractive again.

      • yourbestfriendintheworld yourbestfriendintheworld Oct 31, 2012 4:37 PM Flag

        They're 5-10% non-Agency, which was appropriate. They should be moving away from Agency as the Fed makes those less profitable, but non-Agency come with more risk and fit less well with the company's internal evaluation expertise. So there's no rush to flop the ratios just yet. The share buyback indicates they aren't looking for places other than Agency paper to park the capital. With the BV above Market valuation the stock itself is a good investment. But I don't expect that to last too long, since the market is going to get the clue that the mREITs aren't doing SPOs if they're doing buybacks (at least, they shouldn't be) and thus not keeping a lid of fear on potential buyers of the stock. The yield will pull hard on those folks, and they will bid the market price up as long as the yield is all sparkly. Equilibrium for this stock, if 6% yield is equilibrium, would be $60.

    • No complaints really, but I wonder about the percentage of non-agency securities vs agency. Isn't this a hybrid? It's still mostly agency. Shouldn't they be moving money into non-agency securities? Then, are they covering the dividend from the spread alone?? I mean, I like the increase in the value of their agency book, but it's still unrealized. Can you really sell and get the value? What do you do with the money? I guess all of this will be covered in the call. I am just wondering about the real difference between this stock and AGNC. I moved money from AGNC in this stock, but would like to see more non-agency. Any thoughts?

    • Better than I had expected. Stock way up today, and up more tomorrow. I wanted to free up some cash for the volatility of the market over the next couple of months, so I sold off about 20% of my MTGE [booking about $50,000 in gains in the process]. Still holding 50,000 shares, and glad I am. Yeeehaw!!!

    • Wow.. I'm impressed. I'm still digging through it, but WOW!

      • 2 Replies to xxavatarxx
      • Yep MTGE had even a better Q3 than its profitable big brother AGNC:
        ================
        American Capital Mortgage Investment Corp. Reports $4.03 EPS.

        BETHESDA, Md., Oct. 31, 2012 /PRNewswire/ -- American Capital Mortgage Investment Corp. ("MTGE" or the "Company") (Nasdaq: MTGE) today reported net income for the three months ended September 30, 2012 of $146.2 million, or $4.03 per share, and net book value of $25.21 per share.

        THIRD QUARTER 2012 FINANCIAL HIGHLIGHTS

        $4.03 per share of net income
        Includes all unrealized gains and losses on investment and hedging portfolios
        $0.71 per share of net spread income
        Excludes $3.32 per share of other investment related net gains
        $1.33 per share of estimated taxable income
        $0.90 per share dividend declared on September 11, 2012
        $0.54 per share undistributed estimated taxable income as of September 30, 2012
        Increased $0.43 per share from $0.11 per share as of June 30, 2012
        $25.21 per share net book value as of September 30, 2012
        Increased $3.13 per share from $22.08 per share as of June 30, 2012

      • yourbestfriendintheworld yourbestfriendintheworld Oct 31, 2012 4:29 PM Flag

        I haven't looked. Where is all the extra income coming from? A windfall in swaps, or asset price appreciation due to QE3?

 
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