The biggest concern folks have for NLY is the impact of refs. I added up the total of mbs purchased during the last 21 months. It totals 129 billion. This just happens to be the amount of mbs on NLY balance sheet as of sept. 30. This means nearly all of their portfolio has been purchased during the last 21 months. Unless they bought old, high priced paper, they should have a portfolio with a much improved protection against refis.
Their program of selling mbs has caused short term losses during the last two years, but I believe they now have a portfolio that could return great profits going forward.
stanandterri, a simple view. Multiply the dividend by 10% since they would be buying back about 10% of their shares.
Maybe a little more thatn 10% now that their market cap is 14.4 Billion.
Share buy back is up to 1.5 Billion.
But who knows if they will buy back as much as they can at once or spread it out over a year?
If it were me, I would just buy back now.
Based on the earnings last Q as well, factor in your base dividend this quarter will be .45 or .40 before factoring in the buy back.
Based on calender year 2012 which they have three quarters of data on, it looks like they will flip about 50 - 55 Billion of their portfolio based on prepays and the sale of MBS.
And for the three quarter so far I think prepay and sale of MBS was around 41+ Billion.
Their 10Q shows they have purchased 59,518,222 in MBS for three quarter this year.
So on top of what they are flipping they purchased around 18 Billion in MBS.
It's not 100% turn over.
These are the stats on 2011.
2011 - Bough 69 Billion in MBS.
2011 - Had prepays of 23.5 Billion
2011 -Sold 19.3 Billion in MBS