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American Capital Agency Corp. Message Board

  • beta_klumps2 beta_klumps2 Nov 8, 2012 2:16 PM Flag

    Divy cut to $3.00 !

    Based on FED quantitative easing, will drive YIELD SPREAD where only $3.00 can be paid at end of 2013. Once, quarterly trend is established, it will be hard to stop the selling. Remember, large funds using this as substitute for yield return for pension systems, municipalities, mutual funds to goose returns, once they start to see share erosion, the tide will overwhelm the bullish sentiment. With this negative outlook on earnings and dividends, I was shocked earnings got knocked down to $4 from $5.50 and $6.00, in a couple quarters. Longer term, 2 years out, this will correct, dividend will probably stabilize at $2.00 something and TARGET PRICE OF $15 - 20, WHAT IT WAS TWO YEARS AGO WILL BE A GOOD TIME TO REDEPLOY YOUR WEALTH.

    Right now, wealth managers should be protecting their hard earned principle and just sit in a 0.65% money market account and wait to redeploy wealth when the risk to principle is low. Right now, you could loose 50% - 60%, just to captual a quarterly 4% dividend. Wait a year to capture the 4% quarterly divy when the stock price is $15-20, the odds are in your favor. Folks, I did the same analysis above a couple years back when I bought this at $18. I took my money off the table when it hit $36 after reporting lower earnings from quantitative easing. This was topping this year in the mid-thirties, if you are a good money manager, you should have sold your AAPL and AGNC near their tops. If you didn't, learn from the mistake and don't go down with the ship.

    Sentiment: Strong Sell

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