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American Capital Agency Corp. Message Board

  • yourbestfriendintheworld yourbestfriendintheworld Jan 7, 2013 12:11 PM Flag

    OT: JMI

    I happened across JMI last night while rooting around for ideas in the high-yield bin.

    Looking into it deeper, I decided it had behaviors similar to ARR (mostly the monthly-dividend thing), and considered splitting my ARR holdings and diversifying into it.

    Then I discovered its IPO filing from last Fall and found considerable humor in the revelation that the reason it's similar is that JMI is to ARR what MTGE is to AGNC; i.e., it's another MBS fund managed by the same manager that is constituted to do more non-agency trading than the original fund. That is to say, I LOL'ed.

    So I almost certainly will split my ARR into JMI+ARR, and probably in the same proportion as my MTGE and AGNC holdings, which is currently 2:1.

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    • I actually read their IPO prospectus but decided that it was better to wait to buy (IPO price was $20). The general rule of thumb for "fund offerings" like this is to wait to buy until after the IPO because the lack of track record and start-up costs can cause the price to decline subsequent to the offering. Plus, I agree that it IPOed at a bad time generally for REITs and the market. I bought some back in Nov at $17.75 plus I got some nice dividends so I'm very happy with it so far. However, it is going to be the next earnings release that is going to help determine whether this goes higher or not. Since I already own ARR and trust their management, the investment made sense for me.

      Sentiment: Buy

    • I'm waiting for JMI's earnings to get more info.
      All they had released when I looked was an initial 10Q which said they had 1.1Billion on Agency MBS, and 100 Millio in Non Agency.

      They IPO'd literally at the worst possible time for MBS prices.
      So all that fat comprehensive income all the other MREITS are getting should be absent at JMI.

      They should also see a decline in book when MBS prizes go back to normal.
      Maybe that is a mis-leading statement. Probably all Mreits will see a decline in book.
      But JMI didn't get a gain in book since they came out of the gate when MBS was at it's peak.

      Anyhow, at least for me. If their quarter looks ok, I'll try to add a small stake if I can get in on a dip.

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