It seems as though the market thinks AGNC is going to slash its dividend.
Why else would a stock with a 16% yield be dropping with less than 3wks. until its ex-date?
The sooner management declares its dividend, even if there is a cut, the sooner AGNC's will start rising.
Last year(4thQ2011), from what I remember, there wasn't much of a divvy run AFTER the div. announcement.
I sold my shares with a relatively minimal gain, hoping/planning/expecting for a spo immediately at the start of the new year.
That spo never came that quarter(1stQ2012), and AGNC's pps rose without me.
Having mostly missed the 4thQ3011 dividend, and mostly being on the sidelines through the 1stQ2012 pps run, I missed out on a great opportunity.
Holding shares until Sept. was the play, a play which I am considering now.
I've adjusted my "flash crash" buy to 30.50.
Other than that, I'm already holding my full position of AGNC this quarter.
My average cost for this quarter's shares is 31.60.
I bought on the way down.
I sold some on the way up, but the shares I have left are "underwater".
So, I am in the same position as I was last year at this time:
Waiting for a dividend announcement,
Hoping it is not cut, and
Mulling over the small possibility of a "special dividend".
I do not think that the dividend gets cut, nor do I think AGNC has a spo next quarter.
I may just hold this one through the ex-date this time.
Any ideas, pro or con, to these predictions and plan, are most welcome.
A dividend cut is a certainty. The only uncertainties are the timing and the amount. Honestly, I'd rather management cut now to get rid of the uncertainty holding the stock back. We were in a similar situation last year (a suspected cut was coming) and the result was a poor run in December followed by new highs post-cut. I doubt new highs follow this cut, but getting rid of the uncertainty will help.
But I don't believe management will cut this Q, since they've stated they want a CONSISTENT dividend policy. Waiting until Q1 makes it consistent for the year and gives them more time to project what the full 2013 year will look like. In the past, management has made comments about believing asset prices would come down sometime in early/mid 2013. Meaning they likely believed the spread would increase in the later half of the year, allowing them to set a higher dividend level for the year than might be indicated by current spread levels. My guess is they will wait as long as they can to set the new dividend rate in the hopes of having to avoid re-adjusting downward twice in one year, which is not "consistent". So, Q1 2013 it is.
$1.25 this Q, possibly post December Opex. I guess we'll find out in the next few days (about the timing at least).
the handwriting appeared on the wall when the Fed started buying MBS. i bailed on the last half of my shares then, and have been waiting for the dec announcement to maybe get back in. if they don't cut, i will wait til 1q13 announcement.
i have not yet sold my shares of an outfit that does 100% adjustable agency paper.
I would be careful owning reits now that the Fed is out to lower interest rates and spur home refinancings. I think reits will take a step change down during the first quarter due to tightening spreads. I am surprised the sector is not down even more than it is today. Good luck to you. Take a look at PSEC in place of some of your mreit investments.
Last Thursday, MITT was first out of the gate and announced a dividend increase. Friday morning the mReits gapped up but then gave up some gains. Then Monday the sector rallied.
Monday night CYS announced a regular div. cut but also declared the special dividend. DX announced the same dividend. Then Tuesday morning CMO announced a cut. Tuesday the sector popped at the open but reversed course and sold off into the close.
Tuesday night HTS announced a cut. Wednesday we sell off more and here we sit at mid-day.
Thus far we have one increase, one the same and three cuts (not including the special dividend).
I believe that is why we haven't seen an advance in the sector yet. We are back where we were in the middle of last week.
If the reaction is based on the belief that the dividend will get slashed THIS quarter, then you should be ok. I expect to see the 1.25 declared for this quarter. Holding after ex is a crapshoot. JMHO.
I added shares today at 31.13 and 31.0099.
I guess I have more confidence in AGNC's management than many(most?) here.
With the buyback being instituted, I think 31 is the magic number that management wants to pin its pps before the dividend is declared.
With no cut in dividend, this bird will soar.
AGNC is already somewhat of the darling in the REIT sector.
If it does not cut its dividend, declaring it to be 1.25, imo, not only would AGNC get an extra boost, but other REITs that have yet to declare might pop a bit in anticipation of them holding fast their own dividends(WMC, AMTG, MTGE, etc., for example).