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American Capital Agency Corp. Message Board

  • onion1273 onion1273 Mar 21, 2013 7:37 AM Flag

    OT: MTGE; what happened?

    is this price move warranted?
    I am long the stock ( still at a profit)
    I have synthetic long in ( Long Jun 25 calls and short Jun 25 puts)

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    • This is a reply to taymere_lane's post below...the system wouldn't let me reply directly --
      "That was me. I rotated out of WMC and used the cash to buy more MTGE today. I had 2x the div in unrealized gains on WMC which is my minimum threshold for swing trading. I made that in less than a month holding period, and got out before the next SPO or selloff, I am satisfied with that. WMC is in the SPO zone temporally and on p/b valuation, whereas MTGE is now trading just a smidgen below BV and with it's fairly recent SPO in February it probably won't have an SPO b4 the next post ER rally. Also, the 30y UST rate backup trend that was formerly greatly benefiting one of WMC's hedge positions has come to a screeching halt on Cyprus flight to safety. Cyprus has also made MTGE's February SPO timing fortuitous in hindsight, so I expect BV gains for MTGE in 1q13."

      I applaud your strategy. I have loaded up on MTGE during the recent dip as well. I considered selling a large portion of my WMC shares since they have been rising nicely, and ex-div is coming up as well as a possible SPO, to rotate even more into MTGE. However, I decided against the move when I checked WMC PPS performance after ex-div and was very impressed with how PPS usually ended HIGHER the day of ex-div than the day before, meaning that it completely recovered the amount of the dividend and more in just one day! So I figure I'll just keep WMC for now. GLTA.

      Sentiment: Buy

      • 1 Reply to amiculus60
      • Correction: Disregard the last 2 sentences of my post above. I read the data incorrectly. It is true, though, that in its short history WMC pps has usually recovered the value of the dividend very quickly (5 to 10 trading sessions). I am still considering whether to rotate more funds out of WMC and into MTGE.

        Sentiment: Buy

    • Thanks Tay.......... everything is coming up onions (pun intended)

    • Hey Onion,
      I'm fully loaded in MTGE at the moment.

      With relatively no div. run in the 1stQ,
      I held through ex,
      and added more on the dip.

      Maybe a big pop in store for MTGE, imo.

      With goood earnings a div. raise possible.

      Even with more shares in the mix, MTGE still had extra cash after the ex.

      A regular quarter for them, add the newly infused funds,
      and the company will be FLUSH by declaration day

      Will we finally get that 1.00?.
      I'm betting on it currently.

      Good luck,
      FOXY

    • Feeling a bit better about MTGE, I hope.

    • Good question. Both AGNC & MTGE were trading at about 98% of BV (according to another poster) yesterday, so I would certainly expect a similar rate of increase in pps until the next XDIV.

      • 1 Reply to walrus8
      • That was me. I rotated out of WMC and used the cash to buy more MTGE today. I had 2x the div in unrealized gains on WMC which is my minimum threshold for swing trading. I made that in less than a month holding period, and got out before the next SPO or selloff, I am satisfied with that. WMC is in the SPO zone temporally and on p/b valuation, whereas MTGE is now trading just a smidgen below BV and with it's fairly recent SPO in February it probably won't have an SPO b4 the next post ER rally. Also, the 30y UST rate backup trend that was formerly greatly benefiting one of WMC's hedge positions has come to a screeching halt on Cyprus flight to safety. Cyprus has also made MTGE's February SPO timing fortuitous in hindsight, so I expect BV gains for MTGE in 1q13.

 
AGNC
21.450.00(0.00%)Sep 29 4:00 PMEDT

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