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American Capital Mortgage Investment Corp. Message Board

  • oldschoolbuilder oldschoolbuilder Jun 19, 2013 4:30 PM Flag

    Don't forget the hedges!

    Rates sold off hard but FNM 3.5% and 4.0% coupons way outperformed swaps and swaptions really kicked in here. If this continues you get reasonable BV protection (BV may be down some more but not huge according to the presentation management gave last week) and wider spreads on new investments. Buying at this price is like buying at $19.21 given that the dividend will be paid next week, or about 85% of estimated 6/30 BV. The nearly 17% dividend yield should be sustainable and management indicated that if mortgages sold off much more it would be comfortable taking leverage higher. The company will also be buying back stock very accretively.

    Sentiment: Strong Buy

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    • Right , but the problem is these TBA's.
      This is what I was talking to InstantWin yesterday about.
      It might end up being a continual slaughter on that front if they didn't back down their scope of TBA's.
      It just takes one day like today and the next month of TBA's settlements will be more losses.

      I'm not trying to be a bear either.
      This is one of those things where Gary bet one way and the market went the other.

 
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