Do we need another -5% day for you guys to realize this stock is grossly over valued?
AGNC just posted MUCH better than expected earnings and now it's selling off. Have you guys been taking notes?
Instead of dissing me, perhaps you should learn a thing or two.
This stock is going to the upper teens in no time, mark my words.
For everyone who bought over 24, you'll never see the stock go that high again. If you hold in hopes, you're risk is huge. If there is even a HINT of the fed raising rates, this stock is toast.
You are joking right? I bought AGNC early after their IPO. Their new lead mgmr ia highly regarded in this space. They've gone up 60% in a few months time. What planet have you been residing on??
Kain reconfigured their portfolio which is a success. They paid a huge D with .79 left over to add to future D's. He increased leverage in a time of financial stabilty which is higher then the sector but low compared to the past when the likes of NLY were 10X.
Spreads are very wide right now. Repo markets are stable. Libor is low low. Are you aware of this??????????
Compare what AGNC has paid out in D's since their inception. Stock appreciation as well.
So their stock price went down on the back of Widner, at SN, poor analysis. This are called a buying op's. Done this a million times in the Agency sector.
If you think that AGNC is going to sell in the teens at a discount to BV, when the sector is at nice premiums you're nuts. Diss away. But anyone following you is just going to look stupid, like you, when you compare today's price vs. their next D announcement.
I think Justin has some points, but lets admit that HE WAS CORRECT about the recent run-up not holding.
Book value $20.76, but if they pay out $1.50 then book will be $19 plus change.
I say it goes back to $21.75 ares...that is where i bought originally, and that is where I would consider adding some. With book value adjusted downward for the next distribution buying at $21.75 would still be significantly over book value.
As for NLY, I think it is definitely over-valued.....it could go back to $15 area very easily.
I will be selling $20 puts if it continues to sell off, or buy the stock, selling $22.50 calls for December, and collect the premium as well.
I agree with Justing that it will not see $25 again...Look at the price of calls and you can see for yourself people are not willing to bet much money on that price area.
I sold sold ANH Thurs and Friday and also some CMO Friday so as to have funds for more AGNC. the one thing you rose-colored longs are not considering is the amount of leverage AGNC employs...in good times that helps distributions immensely, but if the spread narrows, it is extra risk for smaller rewards. NLY and CMO employ about 6 to 1 debt to equity while AGNC is over 7 to 1 for that ration.
Disclosure Long AGNC, but have sold covered calls on all position to protect principal.
Looks to me like either AGNC is close to a bottom or the entire sector is over valued. If you compare AGNC's price action compared to NLY over the last six months , you would find that starting mid June AGNC became over valued or NLY under valued. Now they seem to be in sync again which is what leads me to believe AGNC is either near a bottom or the entire sector is over valued.
Of course if there is a serious market correction, AGNC would be expected to participate. Expected dividends, however, do make a difference because projected yield always sets a floor on downward price pressure.
AGNC seems to sell off after the dividend shows up in peoples accounts (more so than ex-div). I don't know if that means a look of ignorant people are buy and selling in a dividend play or if it is being manipulated. I would expect it to trend down until next dividend announcement...then up to ex-div, then fall again after it shows up in accounts. This action bouyed by the tides of the market generally and concerns about interest rate risk. I am playing the rise and fall with options trying to add another 50% or more than the dividend in cash flow. Works most of the time.