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Invesco Mortgage Capital Inc. Message Board

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  • oldschoolbuilder oldschoolbuilder Jan 23, 2012 1:51 PM Flag

    Is this the share buy back

    I doubt it. More likely it's investors starting to recognize the positive market momentum that I referenced in my previous posts.

    I would be surprised if IVR was all that active on the buyback front (but it is a possibility that some shares were bought when the stock was around $14). It really doesn't matter much.

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    • pws112 Jan 25, 2012 11:04 AM Flag

      Oldschool I value your opinion,do you think a rate push-back by the Fed will have a significant effect on IVR's swaps?

    • pws112 Feb 7, 2012 11:39 AM Flag

      It will also be very interesting to see if management bought back any of IVR's shares for the past quarter. At the depressed prises IVR fell to during the past quarter, I find it hard to believe that they didn't buy shares back even if the amount wasn't the total 7 million approved by the board.

      • 1 Reply to pws112
      • PWS, when IVR made the buyback announcement, it was after the dividend cut announcement. I can't remember what level the stock fell to after the divy cut, but think it was still over $14 (it was running up to $16 when they announced the cut). This is why I think they made the announcement -- to stem the decline -- and it worked.

        Many mREIT managements are paid a management fee based on total assets under management. Selling assets to buy back stock does not increase the assets under management, so there is an inherent conflict of interest in this decision. Second, to admit to the board of directors that management cannot find assets with a better return to invest in or that it can't find a different way to narrow the gap between the stock price and book value is a severe admission, and one that a mREIT manager is not likely to make unless they also want the board to start thinking about liquidating the company. With mREITs, they say you can never have enough capital, which means they are reluctant to give it back (through buybacks).

    • pws112 Jan 23, 2012 3:49 PM Flag

      Look at IVR's recovery in only 20 days:

      For the 20 day period begining the day after the X-div date and as of today's close:

      12/20 IVR Opened $14.19

      1/20 IVR Closed $15.01 up 5.8%

      ps: that's not even including the $0.65 dividend payable 1/27/12.

15.3065-0.2035(-1.31%)2:48 PMEDT