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American Capital Mortgage Investment Corp. Message Board

  • linelong77 linelong77 Feb 24, 2013 1:31 PM Flag

    question for this astute board


    Why do many posters here believe that mtge is a better play than wmc? is it because wmc has a shorter history? tia.

    This topic is deleted.
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    • Gary Kain, until events indicate a significant and persistient downside to his stewardship.

      Sentiment: Hold

      • 1 Reply to e2ipieqneg1
      • WMC has had multiple insider buys over the past 6 months. No insider has sold. The REIT's carter gives them flexibility to go after non-agency and commercial opportunities as needed.

        Shorter term MTGE probably attracts more attention because of AGNC's proven track record. WMC managers are no slouch either, they have bee in the business for decades.

        Both are quite attractive for the long haul.

    • I have both of them,both are good,your choice,do your own dd.

      Sentiment: Strong Buy

    • jackhiller Feb 24, 2013 10:33 PM Flag

      Can only guess, here goes.


      1. ery high leverage at over 8, and to save money, modest hedging, so the pop in mortgages rates in Jan will have slashed the BV to be reported in a week. In contrast, MTGE leverages less for its agency backed mortgages (6 range), and is well hedged against interest rate spikes.
      2. WMC did noit reserve any earnings as a piggy bank the way MTGE does.
      3. Kain has demonstrated an uncanny ability to increase BV thru interest rate movements, but WMC is an unknown.
      4. MTGE just launched a good substantial new equity with its SPO that timed tghe rise in mortgage rates to the best spread in many months.
      5. MTGE has acted on its charter to bvuy highly profitaable, risk adjusted, commercial mortgages, but WMC has yet to buy in the commerial market.

      I'm afraid that WMC is about to report a severe cut to its BV, and thus will not be able to launch a SPO very well to take advantage of the interest rate profit spread that just materialized.

      Based on this guesswork analysis, I rolled out of WMC and into MTGE on its SPO dip.

      Sentiment: Strong Buy

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