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American Capital Agency Corp. Message Board

ray858945 100 posts  |  Last Activity: Aug 26, 2015 10:56 AM Member since: Sep 17, 2012
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  • Reply to

    There is something seriously wrong here.....

    by hasselmeyer Jul 2, 2015 1:50 PM
    ray858945 ray858945 Jul 2, 2015 2:14 PM Flag

    Unless you think that the divy will be cut sometime soon, and I don't, you have to be nuts to sell this stock at this level. It's paying 16.6% at the current price, and sports a big discount to NAV. End of story. Figure out the fate of the divy from your analysis, and act based on that. Period. All the other gossip means nothing when you have a divy over 16%.

  • Reply to

    Outstanding value.

    by sammypiot Aug 6, 2015 9:43 AM
    ray858945 ray858945 Aug 6, 2015 10:34 AM Flag

    That's how I see it, Sammy. Divy will be maintained thgis year, and probbly increased next year.

  • Reply to


    by dr.hughakston Jun 19, 2015 4:40 PM
    ray858945 ray858945 Jun 19, 2015 6:16 PM Flag

    Doesn't RAS hold a big chuck of IRT, like 1/3. It's enough that I believe they consolidate IRT into their financials in which case you have an investment in IRT by owning RAS.

  • Reply to

    There is something seriously wrong here.....

    by hasselmeyer Jul 2, 2015 1:50 PM
    ray858945 ray858945 Jul 2, 2015 7:32 PM Flag

    Management has said no more ROC, and I believe that. I think $0.72 is an excellent possibility as follows:

    [1] $0.16 AFFO last quarter which included - $0.04 in hedging losses from the MREIT subsidary [per CC]. That was an exceptionally difficult quarter for MREIT's, and just cutting that loss in half would produce $0.02 more AFFO without any other improvements.

    [2] Their biggest placement last quarter was only in place for half a quarter.

    [3] I think they have been buying back shares which may improve their per share numbers.

    [4] Interest rates are up nicely so any new placements should have better spreads and pre-payments are probably zero.

    Any one of these could increase AFFO to $0.18 in the 2nd quarter. Now, other things could have occurred, so we'll see, but I think a divy of $0.72 will increase their PPS to $5.00 and $5.50 when it happens in consecutive quarters.

  • .... that a $3M charge was made to both GAAP and AFFO worth about $02.5 per share. So, instead of booking a $0.17 or $0.18 per share AFFO, they got $0.15 due to an investment made in 2007 before the crash.

    A lot of people will want to sell, but I wonder if it is the right thing to do. Everything was on track until Puerto Rico imploded. Not sure that selling low is the right thing to do.

  • ray858945 by ray858945 Jun 16, 2015 3:58 PM Flag

    There is a lot of mistaken information about REIT's on this board, so briefly:

    Equity REIT: Buys the physical real estate, and pays dividends with the profit which is lease payments less expenses.

    Mortgage REIT: One type is the company that takes some equity, adds some leverage from bank credit lines, and loans it to companies that aren't attractive to banks either because of size, credit worthiness, or both. This is 95% of RSO's business, but it is not what are usually called MREIT's.

    MREIT: This is companies like AGNC, MTGE, etc. etc. This is completely different than the mortgage REIT described above. Here, companies take some equity, adds leverage from the repo market, and buys securitized residential mortgages. RSO purchased a small company that does this a few years ago, and now RSO is about 5% MREIT.

    Hybrid MREIT: Same basic business as above, but while companies like AGNC purchase only securitized mortgages that are guaranteed by the Federal gov't ["agency mortgages"], hybrid buys those plus non-guaranteed mortgages [typically "jumbo" mortgages] which yield more. An example is MTGE.

    Now, if rates go up, this can greatly affect MREIT's because the amount of leverage they can borrow is based on their NAV. In a rising rate market, they might have to liquidate some leverage due to a drop in their NAV.

    This isn't the case for most of RSO's loans which use revolving credit from banks as leverage which won't be called if rates rise. In fact, rates must rise for RSO to make higher returns by lending at higher rates. If the stock doesn't always trade that way, it's because people don't understand the business of RSO which could be a great time to buy .... like now.

  • Reply to

    RAS has a great model

    by valubyer Jul 1, 2015 1:28 AM
    ray858945 ray858945 Jul 1, 2015 3:59 PM Flag

    Also added today.

  • ray858945 ray858945 Aug 4, 2015 10:27 AM Flag

    Davis ...

    A lot of people - like me - look forward to your posts .... don't let the naysayers bug you. Thanks for all the work.

  • ray858945 ray858945 Aug 3, 2015 1:11 PM Flag

    So you're saying that the proceeds from the sale of stock will be used for nothing ... no increased revenue, just increased shares. Well, I guess that explains why REIT's - which use follow-on offerings all the time - have struggled. Thanks, dude.

  • Reply to

    Bought more at $2.99

    by lenyw Aug 6, 2015 2:26 PM
    ray858945 ray858945 Aug 6, 2015 4:54 PM Flag

    The reverse might happen: They do the RS at the end of August .... shorts pile in .... they announce the divy which is $0.16 [not adjusted] but is now yielding 22% .... and the shorts are squeezed ... share price goes to $3.75.

  • Reply to

    Earnings are a Homerun

    by sme20_98 Jul 30, 2015 7:59 AM
    ray858945 ray858945 Aug 3, 2015 1:13 PM Flag

    Added 5,000 shares this morning.

  • ray858945 by ray858945 Aug 11, 2015 11:26 AM Flag

    Is this a message?

    Aug 7, 2015 KESSLER STEVEN J Director
    16,000 Direct Purchase at $3.05 per share. $48,800

    Aug 7, 2015 BRYANT DAVID J Officer
    15,000 Direct Acquisition (Non Open Market) at $3.10 per share. $46,500

    Aug 7, 2015 BROTMAN JEFFREY F Officer
    41,000 Direct Acquisition (Non Open Market) at $3.07 - $18.5 per share. N/A

    Aug 7, 2015 COHEN JONATHAN Z Officer
    250,000 Direct Purchase at $3.12 per share. $780,000

    Aug 7, 2015 BEACH WALTER T Director
    70,000 Direct Acquisition (Non Open Market) at $3.09 per share. $216,300

    Aug 7, 2015 HART WILLIAM B Director
    50,000 Direct Acquisition (Non Open Market) at $3.05 per share. $152,500

  • ray858945 by ray858945 Aug 17, 2015 4:15 PM Flag

    PPS explodes up at the bell. Too much for the buy-back; someone bought big .... heavy volume ..... 2M shares today.

  • ray858945 ray858945 Aug 17, 2015 2:52 PM Flag

    That's 12% .... there are 12 months in the year.

  • Reply to

    There must be a concerted effort

    by mysonchino Jun 3, 2015 3:33 PM
    ray858945 ray858945 Jun 3, 2015 3:41 PM Flag

    Additional positives:

    [1] New loans will be at better rates given the rise in yields
    [2] Lower early payoffs with higher rates.
    [3] 2nd qtr should be much better for the MREIT portion of the business which cost RSO $0.04 of AFFO last qtr, as I recall, due to yield volitility.

  • Reply to

    16 cents

    by kenpalley2000 Jun 19, 2015 4:57 PM
    ray858945 ray858945 Jun 19, 2015 6:13 PM Flag

    Just what the doctor ordered. I think there's a chance that AFFO could be a penny or two more. I also think that the divy could start edging up a little starting next year, and it's already yielding almost 15% from today's price. I'm with ya on this, MySon.

  • Reply to


    by wirtz24184 Jun 29, 2015 5:28 PM
    ray858945 ray858945 Jun 29, 2015 7:14 PM Flag

    Read the transcript of the last CC. Management said that they didn't repurchase any stock in the 1st qtr, but they expected to do so in the 2nd quarter, Much more positive and certain statement than the authorization PR.

  • Reply to

    NAV still dropping

    by yanisbagman Jul 6, 2015 7:01 PM
    ray858945 ray858945 Jul 7, 2015 1:51 AM Flag

    The fund is holding about 7.6% energy related bonds. Oil down big today. Just for the sake of argument, let's say all energy bonds stopped paying. That would reduce the divy to $07.85 per month, or about 12.33% yield at today's PPS. PPS must be near the bottom regardless of what oil does.

  • .... that - for some reason - people think this is an MREIT. In fact, only about 4% - 5% of it is [one subsidiary]. Look at the other MREIT's today .... same loss as RSO. The difference is that MREIT's are mostly RMBS and are leveraged using repo's, and RSO is mostly self-originated commercial loans leveraged with bank revolving debt [usually matched]. Probably this means that the price is currently being set by retail investors, and the pro's just sit on it for the divy.

    Oh well, I expect $0.16 per quarter for the divy this year [two already announced], and $0.16, $0.17, $0.18 and $0.19 per quarter for AFFO this year [one announced]. I have seen nothing so far that would change my estimates. In fact, they have clearly been buying stock which will be very positive at these prices. We should remember that bond yields need to go up to increase profitability: short-term pain for long-term gain.

  • ray858945 by ray858945 Aug 5, 2015 5:44 PM Flag

    Does this sound like a losing company? From the 8-K.

    This transaction continues the Company's practice of term financing its lightly transitional floating rate whole loan originations through its proven access to the CRE CLO market. Dave Bloom, Head of Real Estate for the Company said, "Today we announce the pricing of our fourth securitization, RSO CRE 2015-4. We are again extremely pleased with the support that the institutional investment community has demonstrated in the credit quality of our loans through the successful execution of this transaction just two days after announcing its launch. During a period of significant volatility for similar transactions, our execution at a weighted average cost of LIBOR+171 provides continuing validation by the market of our ability to originate and structure high quality, floating rate, transitional loans. With this transaction RSO has successfully match-funded over $1.4 Billion of our self-originated whole loans in under 20 months. We are achieving a record pace of new loan originations and look forward to accessing the CRE CLO market as a known and trusted issuer on a regular basis."

19.13-0.23(-1.19%)Aug 31 4:00 PMEDT