I own NRZ, and PSEC with you...two of my largest holdings...I would also buy AI for reasons just posted...I would not own anything else you list at these prices and in this rising interest rate environment...but, thats what makes the world go round...we agree to disagree.....good luck STAGG.....board is gaining new members and contributers...which is good for all of us!!!
Why Has Arlington Asset Investments (AI) Done So Much Better Than Other MREITs? 0 comments
Dec 19, 2013 6:48 PM | about stocks: AI
Arlington Asset Investments (AI) is misunderstood, under followed and under priced. People don't understand the differences between it and your typically mREIT.
First Arlington is a C corporation, so in taxable accounts it's yield is taxed at the lower qualified tax rates, not higher mREIT marginal rates. Arlington can do this because they have a lot of tax loss carry-forwards from the financial crises. Thus for someone in the 33% tax bracket, the 13.4% forward yield for AI is comparable to an mREIT paying 16%.
Second Arlington is a C corporation so the yield doesn't have to represent 90%+ of taxable income like mREITs; Arlington's payout ratio is much lower than other mREITs and thus it's dividend much better protected.
Third, AI's agency MBS is almost fully hedged so increases in rates don't hurt them much.
Fourth, it's legacy non-agency assets are adjustable with short durations so increases in rates don't hurt them much either.
Fifth those asset are currently held at 70% of par value. As home prices improve so to have the value of these discounted non-agency assets.
Sixth, HARP 3.0 should be a net positive for these guys, as people in that legacy MBS refinance, the 70¢ on the dollar counted in book becomes $1 cash.
This is why AI has done so much better this year than other mREITs (AI +36% YTD vs. -16% for NLY).
Sold IEP at 116....tight stops sometimes work in your favor...spike in mREITS give those who are still long a golden opportunity to get out....Max, do not be tempted with GGN...it will go even lower....then you can nibble. SFL would have been a nice buy at 15.35 or so....sold CVLY and HBAN....looking at more BAC and Wells Fargo...
My accounts his all time highs today....woopee!!!....up over 20% the past 6 months!!
Making lots of money trading biotechs...INO, ARIA, NIBS and ONCS are my favorites for now...got out of AMRN today on a big run up....up 37% today!
Continue to stay away from weak sisters....SFL (unless you are trading) SDRL, mREITS, gold, silver and industrial commodities.....thats my take, for what its worth.
I love WLL as a big play in the Bakkan....I own it and trade it, as it has a habit lately for trading in a 10 point channel sometimes even smaller...bought my last bunch at $58, will sell in the mid 60's...this happens over and over again with this stock...they need to pay a dividend and then I would buy it and hold it. It also follows the price of oil.
Bought at $58.40.....will buy more whenever it dips to that level....why don't these dopes start paying a divy? It would do wonders for the stock price...they will soon be earning $5.00 a share.
Not a good sign....like I said, stay away until the bottom for these two debt ridden weak sisters is in...IEP not doing any better, so YES, I make mistakes as well.....but I am right more than I am wrong.
Pulled the trigger on KMI.....SDRL and SFL will go lower....I am looking at $15.10 for SFL and 36 on SDRL...I may then nibble on them, but not here....IEP looking like a weak sister as well....almost at my break even point...116.
Very riskey, but could be a big winner....NRZ is a real winner....If I were you, I would sell WMC, and AI...neither will do well in an increasing interest rate environment....they have high yields for a reason....I like CVI as well....will take a harder look at AWLCF.
Good luck....stay warm, STAGG!!
Max...I am taking profits in HBAN, which I bought in the low 6's, and buying more AMNB....4% divy that should be raised.
I think you are right here, Mark....may be more like 15 or 20B, but your assessment is correct. mREITS are bad investments in this environment...divys will continue to be reduced, and I don't understand why anyone would buy these for income or appreciation unless you are a trader or just speculating....NLY would fit into this catagory and would be the only REIT I would even consider...but WHY?? THere are plenty of other divy payers that do not pose the risk of mREITS....why bother?? SFL, SDRL, and mREITS continue to be weak sisters in any market downturn...stay away from them, IMHO.....they will ralley when the market does, and sink badly when the market goes down......I love NRZ, PSEC, STON, OZM, PDH, LINE, CVI, BAC, sm regional banks...also AB and AEG for the strong of heart!
I also like WLL on any dips under $60...no divy though so beware!!!
Wow...great news....I love NRZ, as it will do well even in an increasing interest rate environment....PSEC is my largest holding, followed by NRZ.
Buy it...I own it, and it has been strong even in down market days.....nice divy, kind of like a mini GS.
Finally cought a breat..both up today....IEP down though.
Market up over 120 and weak sisters down....SFL, SDRL, WMC, AGNC, NLY ...steer clear of these...if they are
down when the market is up, imagine what will happen when the market corrects??
Its a pfd issued by Dominion Resources....pays a floating rate monthly that rises as interest rates rise....priced at $19 and change, callable at $25...just saw this on Seeking Alpha this AM...I am looking to buy it for my Roth Income account...I also own PSEC, NRZ, NCV,STON in that account...I also own in my trading account, OZM,
EHI, AB, and PDH thanks to JK Price....
I like it for a trade in the low $15's...when the market corrects, it will dive, and quickly, so I would not hold it in a down market.;..ditto SDRL, mREITS, UAN, HIX and the like.
Thanks, JK.....I also like AEG....trading at 55% of Book value and will do well in an increasing rate environment... as will NRZ...also a little high here.....I bought AEG it in the 6's, so you may want to wait for a correction. Like Banks, insurance companies will earn more on their holdings when rates increase...I am older so I tend to look for high divvy payers.....RB Gambler...
I like WLL as well...anywhere from 58 and under, its a steal....only a matter of time before its $70. again...looking at your PDH.....have a nice weekend.
NRZ is one that will prosper in rising rate environments....thats why its up!!!
Better to hold PSEC, NRZ, STON, LINE, EHI than SFL....earnings are right at the divy level, and if they reduce the divy it will tumble....SDRL has huge leverage and debt...you and STAGG have been right on it...good luck...no luck with CVI....as soon as I buy it, down it goes...I like it long term though!