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American Capital Agency Corp. Message Board

  • engie095 engie095 Mar 6, 2013 2:47 PM Flag

    OT: WMC and potential SPO before next ExDiv

    With a good earnings report and jump in price for WMC today, what are the chances of an SPO in the very near future? I exited most of my positions in case they announce before the dividend announcement. I doubt they'd SPO between the dividend announcement and ExDiv, but who knows. I'm giving it a 75% chance that they'll SPO on ExDiv (or +1).

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    • engie - While it is possible to see a SPO for WMC, I think we need to see a further price increase first. Year end book was 21.67 (not sure what it is today). If you take a $22 stock price today and discount it by an estimated 3% SPO discount that is 21.34.

      • 1 Reply to jtrader64
      • Hi jtrader, BV is now $21.67. If WMC is included in the SP600 (SML) soon, they like other mREITS included, may start rallying to trade at single digit dividend yields. If that happens I am sure WMC and all the other mREITS will issue lots of shares along the way. For me such a huge sector revaluation move would be unfortunate because it would mean I would stop trading mREITS just like I stopped trading energy MLP's when they got too rich for me. The party would be officially over.

        In the short term, I think you're right that mid $22's would be the minimum for an SPO. An intermittent ATM type deal could be launched right now at current prices, but those ATM's don't crater the price like SPO's do.

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