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American Capital Agency Corp. Message Board

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  • instantwinbutton instantwinbutton Jan 8, 2013 9:10 PM Flag

    AGNCP - What are the disadvantages?

    "99.9% of the time you are giving up higher yield and higher chance of equity appreciation on the common" No. By buying the preferred you are perhaps getting a better FY 2013 yield then if you bought the common today, and perhaps better price performance than the common in 2013 (Maybe the common drops, reduces the dividend, or possibily suffers NAV losses. I own the common but not the preferred. I would buy the preferred if it traded closer to par (thus more yield) than today. ARR-A is a better pfd stock than AGNCP right now. Another preferred to check out is GreenHunter Energy Inc TICKER: GRH-C yielding 13.6% pays monthly. Or... Miller Energy Resources Inc TICKER: MILL-C yielding over 12% and Apollo Investments TICKET: AINV gave them a 250m line of credit... so a portfolio company of a BDC.. MITT-B.. yielding 8% PFD is nice too. Trading at PAR right now.

    Bottom line. AGNC is attractive as an investment.. but it's not my favorite. I also own MTGE which I find more attractive and JMI which is another hybrid mreit that pays monthly. Go to the MTGE message boards and you can see my "LIFESTYLE" portfolio. 98% of my portfolio securities yield more than 7%

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    • instantwinbutton, is there a reason on say GRH-C the price is dropping?

      Aside from that, it yields 10% which should be a big red flag since it IPO'd in 2012.
      Nobody has to offer a yield that high unless they have credit rating problems or some other problem.

      And then you can look at the price. It's a $25 strike trading at $18.75.
      Something is wrong.

 
AGNC
22.93-0.08(-0.35%)Jul 11 4:00 PMEDT

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