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American Capital Agency Corp. Message Board

  • jdg8002 jdg8002 May 2, 2012 4:18 PM Flag

    Q1 Earnings

    $2.44 comprehensive income per share, comprised of:
    $2.66 net income per share
    $0.22 other comprehensive loss per share
    $1.42 net spread income per share
    Comprised of interest income, net of cost of funds (including interest rate swaps) and operating expenses
    $1.30 per share, excluding approximately $0.12 per share of premium amortization benefit due to change in projected constant prepayment rate ("CPR") estimate

    $2.03 estimated taxable income per share

    $1.25 dividend declared per share

    $1.28 estimated undistributed taxable income per share as of March 31, 2012
    - Increased $0.48 per share from $0.80 per share as of December 31, 2011
    -Represents an increase of $204 million from $180 million as of December 31, 2011 to $384 million as of March 31, 2012

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    • In order to buy a house, you need a job.

      Many jobs went away when the market crashed. The rest of them went away via globalization.

      No job, no house.

      There are not enough people to replace the aging baby boomers. Take a good look at Japan, their housing market crashed 20 years ago and it is still not recovered.

    • It is you Ronald!

    • Is that you Ronald?

      Hot Rod in Gallup.

    • No, no, no, no, no. Sooooooooo many wrongs (in your post) don't make a right. That backlog of foreclosures is NOT massive, but it IS localized (as in CA, NV, FL, and AZ). The rest of the country is doing relatively well (hope your relatives don't live in one of those localized areas).

      As usual, you took one of my points and s-t-r-e-t-c-h-e-d it beyond the breaking point. No, management won't wait forever, but can stand to hold off the next SPO until June (rather than now ... within a few days after obtaining shareholder approval of the additional 300M shares). They don't manage like a kid in the candy store. They are patient and deliberate in their actions --- that's one attribute that sets them apart from all the other mReits (don't know why you keep brining NLY into the discussion ... you must be under water in that stock).

      And, no, you're not on ignore. I listen to what most posters have to say, to consider all points of view, including yours, however wrong you may be. (Every once in a while, you do have a good idea, and I've profited from them, thank you very much.)

    • Hi Al,

      How was your birthday? Is it OK if I get back to not being nice to you, now that it's over?....;-)

      I disagree with almost everything you wrote. It's a message board and we all have different opinions though, right? So it's all good, you are certainly entitled to your wrong opinions....;-)

      I know your house is on the market and , as I commented, it is a very nice home. The housing market is not bottoming though, sorry. If you have followed my posts, I have been commenting that all of the foreclosed houses that the gov't have held in queue, while investigating the "Robo-signing" scandal, are now ready for market, like in "one little piggy".

      We are talking massive numbers of foreclosures. How are the banks going to deal with these in addition to the current short sale lists already on the books, that the banks are already being clipped for(negotiating down loan balances, to allow forestalling of foreclosure). Not pretty.

      We are nowhere near bottom. Ask a California, Florida, Nevada or Arizona realtor. I do hope you sell your home soon. You are smart to list now. Get out while the getting is good(euphemism for less lousy).

      >>because the longer they wait, the more income they will derive from its working capital>>

      So why not wait forever? They need continual investment capital. They just raised 1 billion, and it's gone(invested) with hedges in place to avert adverse interest rate spreads. This is a dynamic company with stellar management, that needs continual capital to invest. Am I going to wait to invest in more options until a better rate environment. No. Neither will AGNC. You snooze, you loose.
      This is hardly NLY. I think that was just proved, once again. I could go on, but wait...

      >>I believe they delayed the last SPO until March so that they could afford to wait until June for the next SPO >>

      Convolution. They moved up the last EX and subsequent SPO, and did not wait until the traditional Mar Ex , after Mar OPEX, in order to get the 1 billion earlier to put to work early, without having to pay the dividend for all the extra shares, than if they had had , an earlier spo(before EX). Absolutely brilliant. A stroke of genius!

      Would NLY think of that? I think we know the answer. They still give out gold watches at retirement. Problem is the watches turn green within months. Let me tell you about my friend's sister sometime who got a ring like that from her fiancée.

      >>market perception will depend more on what AGNC analysts were expecting.>>

      Might go down. I don't think it will stay there. The market is looking for a winner, to hedge their bets in a puny rate environment. So who has a better report, NLY, IVR, HTS, TWO, CIM, CYS, MFA, ANH, or ARR? Where will they park that 5% that their investment gurus tell them they should have in mReits.

      I think we both know.....;-)

      Still love you AL. I think we might have gotten out early AL. Hey, you're not mad about following my lead on that, are you? Time to place me on ignore, you'll save oodles. Hey, remind YBF, who has me on ignore, that if AGNC moves EX up to early June, they'll re-price all of his Short June Puts. He'll be out much moolah. Oh well, serves him right for placing me on ignore.

      Thank you AL, for being a patient listener,

      Your old pal,


    • $1.28 estimated undistributed taxable income per share as of March 31, 2012

    • What stands out to me at first glance:

      1) Net Interest income covered the dividend. No trading gains/losses were necessary

      2) Undistributed taxable income spiked over 50% from Q4. Plenty of flexibility for timing new SPO's

      3) Although relatively small, the $.12 "amortization benefit" recognized because they changed the projected CPR rate is interesting because it indicates they foresee mortgage rates moving higher at the end of Q1 then they did at the end of Q4. Higher mortgage rates = fewer prepayments. Fewer prepayments lengthen the life of the MBS and stretch out the amortization period (lowering the amortization charged in a given period). I would think it takes a large CPR shift to get that much benefit, but I guess we'll find out tomorrow.

      Very good report at first glance.

      • 6 Replies to jdg8002
      • -----
        1. Net Interest income covered the dividend. No trading gains/losses were necessary

        this was unfortunately, not true... they used the correct share count in nearly every calculation, except for earnings per share, where they only used 80 percent of the true share count to come to those numbers.

        using the real share count of outstanding shares in March when they gave out that dividend, it was 300 million shares, which means they had net interest income of below the dividend once again.

        and that is quite interesting, i've never seen that before, 300 million shares authorized, and 300 million shares outstanding.. they sold every single share in march, and then 6 million shares more of preferreds. they apparently saw something in the department store window that they just had to have..

        hmmm, i wonder where all that book value came from :o/ lets put it this way, there is a bunch of cash sitting there unspent on the books... so they didn't increase book value by actually earning money, rather than selling shares higher than book value... which isn't a bad thing, but it isn't "earnings" either.

        i don't blame them, if people are "challenged" enough to just give them a bunch of extra money over the book value, i'd sell every last share i could get my hands on too. and they did just that.... literally..... every single share.

        why they didn't ask to authorize 6 billion shares instead of 600 million is beyond me. apparently people are "challenged" enough to of done it..

      • I agree, big turn around on retention ratio. If AGNC continued to pay out the dividend amount of $1.40/qtr in excess of income or from last year it goes against BV and presents a negative market valuation climate.

        Now that they have "undistributed taxable income", meaning more interest free cash on hand for investment, they can put that to good use..It's good managment, and at an annual projected 27% return on equity is very encouraging.. If they can tale retained ffo and get 27% this stock price should grow between 11 to 12% over the next 3-9 months.

        Good luck to all

        Here is a free google access to some funds from operation valuation analysis.. This stock has a deduced upside value to $62/share.

      • so what do u guys think of SPO?

      • I should clarify #2 refers to the per share number. Actual amount went from $180M to $384M, obviously an increase of more than 100%.

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