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American Capital Agency Corp. Message Board

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  • xxavatarxx xxavatarxx Jan 30, 2013 6:04 PM Flag

    OT - CMO earnings release

    Q4 isn't going to be pretty.
    But potentially Q4 might be the bottom end on Mortgage rates.

    And MBS prices are down since Q4, and down even further off the Q3 highs.
    It's going to hurt book, but MBS prices need to come down.
    If they stay high for two long the agency reits are in big trouble.

    Overall it's not great news, but maybe the worst is over. We'll see.

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    • ---------------------------------
      Q4 might be the bottom

      Let the beatdown begain, I'm shopping.... : )

      • 1 Reply to bovisutor
      • As far as AGNC & the Q4 bottom goes, the dividend announcement will be more important than Q4 earnings because their stated policy is a consistent dividend throughout the year. Taking the Q1 dividend times 4 gives you a rough approximation of what management believes it will earn throughout the year from a tax standpoint (essentially exclusive of unrealized gains/losses).

        I see a lot people predicting .90 or $1, but that's a backward looking prediction on something that is, by necessity, is a forward looking calculation. They've said in investor presentations that they believe yields were going to increase as early as March. I expect a dividend cut, but I'm more interested to see if the dividend comes in higher than the Q4 earnings might support.

        The other sign of health I'm looking for is an SPO, but BV is going to play a part in that. I'm not sure they can do one below that level.

        In other words, if the dividend comes in at something like $1.10, than its game on imo. But nothing short of an SPO would have me buying before the div announcement.

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