American Capital Agency Corp. (Nasdaq: AGNC) ("AGNC" or the "Company") announced today that Gary Kain, President and Chief Investment Officer, is scheduled to make a presentation at the Bank of America Merrill Lynch Banking and Financial Services Conference on November 14, 2012 in New York City. The AGNC presentation is scheduled to begin at 3:25pm ET.
Sentiment: Strong Buy
What I thought was funny is he had to clarify the taxation on the dividend yet again. Can you imagine what it is like to be an IR there. It would be the same question over and over and over and over and...
Takeaways from Gary’s presentation:
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
The presentation will be posted on AGNC's website shortly under IR. He mostly reiterated what he said in the ER about the kinds of mortgages they hold with low repro rates and how they are hedging. Gary tried to reassure the audience that AGNC was being managed very well in this low interest rate spread environment, but there were other MREITs that were not going to perform well.
Sure looks like a buying opportunity right now, but I am still on the sidelines with my cash.
GL2UA and go AGNC.
I've posted direct links, but Yahoo eats them.
Go to the IR section of AGNC's website and click on the first words under "Recent Events"
"Bank of America Merrill Lynch 2012 Banking and Financial Services Conference – New York, NY – November 14, 2012 at 3:25pm ET"