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American Capital Agency Corp. Message Board

  • reit_freak reit_freak Mar 8, 2013 4:30 PM Flag

    OT: AMTG SPO (Onion, any read on these guys' numbers?)


    Saw the announcement of the 6.8 mil (+1.02 mil shr option for underwriter) secondary overnight. Price was not specified. Their earnings earlier this week, while "missing", looked pretty respectable (relative to dividend coverage) to my untrained eye. Based on last year's dates, their next dividend declaration should be imminent with an ex-div date late this month. Options volume is pretty light. I have neither followed nor traded AMTG to date (they've only been public for six quarters or so), but will be digging into their story this weekend. Does anyone here have any history, knowledge, or (informed) opinion on these guys? Onion, I purposely stuck your name in the subject line to catch your eye - as I particularly value your fact-based assessments with regard to mREIT financials and MBS topics in general.

    Any and all thoughts would be welcome and appreciated.

    Go AGNC,

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    • Freak,
      I have not followed these guys too closely. I read up on them a while back and did buy the preffy based on the business model, and my goal to diversify from mReits with 100% agency paper, and my goal to increase preffy holdings in general. AMTG invests in Non agency RMBS as well as Agency. Non agency RMBS began trading much higher with all the QE going on.
      That being said I am personally seeing all MBS yields inching up ( especially after the employment numbers)
      Fed fund futures still point to no rate hike till Oct 2015. All this is good for us.
      Just an aside, as I see all MBS yields rising, and all the SPOs going on I am thinking next Q earnings may show improvement across the sector.

    • Hi RF,

      I wanted to trade AMTG today, but there was this repellent emanating from my keyboard while looking at options. Way overpriced, IMO, for the time it took last spo to crawl back up out of the hole(over two months with the EX way in the future..not just two weeks give or take, like right now).

      They decreased their Dec dividend over Sept(subtract the special). They gave a whopping discount of half a buck to the common today(cf over twice as much last Apr 17). Shake that all together with just a few weeks before EX, after which they should really hit the skids and this literal dog, IMO, does not hunt.

      I own a bunch of the Preferred(thanks Onion), and that's where I will stay.



      • 1 Reply to reits_r_us
      • Doc,

        Thanks for your thoughts. Good points. I also noticed that buyers didn't exactly tear through all the SPO shares today, either. That being said, I did go ahead and pick up a few of the April 20's for 2.25 late in the day when the pps was bouncing around 22.20. (Our collective, consistent success in playing the AGNC SPO/div cycles of the past couple of years has made made me a touch trigger-happy when these mREITs announce a secondary.) As per my original post, I'm going to do some more reading this weekend before stepping into AMTG with any kind of size.

        Thanks again,

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