Editor’s Note: American Capital Agency Corp. (NASDAQ:AGNC), Two Harbors Investment Corp (NYSE:TWO), ARMOUR Residential REIT, Inc. (NYSE:ARR), Anworth Mortgage Asset Corporation (NYSE:ANH)
One Put, One Call, To Know About for American Capital Agency (Forbes)
Consistently, one of the more popular stocks people enter into their stock options watchlist at Stock Options Channel is American Capital Agency Corp. (NASDAQ:AGNC). So this week we highlight one interesting put contract, and one interesting call contract, from the October expiration for AGNC. The put contract our YieldBoost algorithm identified as particularly interesting, is at the $22 strike, which has a bid at the time of this writing of 80 cents. Collecting that bid as the premium represents a 3.6% return against the $22 commitment, or a 33.2% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Two Harbors gets lowered price target (Seeking Alpha)
Sterne Agee’s Henry Coffey cut his price target for Two Harbors Investment Corp (NYSE:TWO) to $10 from $11.50, “based on recent trends in peer valuation and expected trends in dividends.” His new 2013/14 EPS estimates are $1.25 and $0.95, reduced from $1.40 and $1.15, respectively, thanks to “changes in portfolio mix, lower expected leverage, and higher funding costs.” The company had a 6.4% drop in book value in Q2 thanks to lower agency MBS value. Two Harbors Investment Corp (NYSE:TWO) responded in part by upping exposure to non-agency loans (credit sensitive) to $440M from $123M.
Reminder – ARMOUR Residential REIT (ARR) Goes Ex-Dividend Soon (Forbes)
Looking at the universe of stocks we cover at Dividend Channel, on 9/12/13, ARMOUR Residential REIT, Inc. (NYSE:ARR) will trade ex-dividend, for its monthly dividend of $0.07, payable on 9/27/13. As a percentage of ARR’s recent stock price of $4.21, this dividend works out to approximately 1.66%, so look for shares of ARMOUR Residential REIT, Inc. (NYSE:ARR) to trade 1.66% lower — all else being equal — when ARR shares open for trading on 9/12/13.
Anworth Mortgage Asset Corporation (NYSE:ANH) – Effects of Fed Tapering (FinancialsTrend)
Anworth Mortgage Asset Corporation (NYSE:ANH) is elected as a real estate investment trust for income tax purposes and as a result it is not liable to pay federal corporate income tax on the portion of the income which it distributes to its stockholders. The company owns a major stake in adjustable rate agency securities, which the Fed (the U.S. Federal Reserve Bank) does intend to buy. Further, the company has sufficient financial backup which elevate to continue its dividend distribution, even if the Fed increases its bond buying program. Therefore, for income oriented investors the recommendation is to long the stock.
American Capital Agency Corp. (NASDAQ:AGNC) and Xoom Corporation (NASDAQ:XOOM) Added to Equity Profile Report’s NASDAQ Gainers Watch List. (SBWire)
Equity Profile Report expands its NASDAQ Gainers Weekly Watch List adding American Capital Agency Corp. and Xoom Corporation. American Capital Agency Corp. a company that operates as a real estate investment trust is currently up (+0.71%) on 891,828 shares traded. American Capital Agency Corp. (NASDAQ:AGNC) is currently up (+13.81%) from its recent 52-week low which has prompted Equity Profile Report to add the stock to their NASDAQ Gainers Watch List.
