Annaly Capital Management, Inc. (NYSE:NLY)

CAPS Rating: 4 out of 5

The Company owns and manages a portfolio of mortgage backed securities, including mortgage pass-through certificates, collateralized mortgage obligations and other securities representing interests in or obligations backed by pools of mortgage loans.

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Player Avatar edwjm (99.87) Submitted: 10/12/2011 2:10:24 PM : Outperform Start Price: $12.74 NLY Score: -66.48

Annaly Capital Management, Inc. (NLY) owns and manages a portfolio of mortgage backed securities, including mortgage pass-through certificates, collateralized mortgage obligations and other securities representing interests in or obligations backed by pools of mortgage loans. All data is as of Sep. 12, 2011, with the share price at 15.82.

The 52-wk high of 18.79 was set in June, the 52-wk low recently at 14.05. The dividend is about 16%. The p/e is about 5½ and the forward p/e is estimated at 6¼. This is somewhat scary because it suggests a drop in earnings. 43% of the stock is held by institutions. The stock price is down almost 11% in the last year. Sell-side analysts are unenthusiastic, but I am bottom fishing here because the stock price is slighty below book value. Since this is a REIT, it must pay most of its income in dividends. These are not considered qualified dividends for tax purposes.

Disclosure: I own share of NLY in my real life portfolio with an average cost basis of $15.93.

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Member Avatar edwjm (99.87) Submitted: 10/12/2011 2:36:55 PM
Recs: 1

My appology for a typo: the data in the original post is as of Oct. 12, 2011, not Sep. 12, 2011

Member Avatar junewell (43.47) Submitted: 11/2/2011 2:07:22 PM
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Do you really need to put in a disclosure? Just wondering.

Member Avatar blessedbyhim (35.86) Submitted: 11/8/2011 3:04:07 AM
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Think of the questions you had to answer when you opened your last brokerage account. They applied to all instances in which it could be discerned as your being employed in a business that would qualify you as an investment professional. So, if you answered no to all of those, then you need not give a disclosure since you would not profit off of said investments. However, I think it is good to know where a pitch is coming from. So, I think you mentioning you are long in a stock you are pitching is a very fair thing to do. You wouldn't have to put it as a disclosure, but could just note the facts as they apply.

Member Avatar edwjm (99.87) Submitted: 11/9/2011 9:37:26 AM
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Now I am wondering: Why does my use of the word "disclosure" raise so many eyebrows?

No, I am not required to disclose my holding of the stock for any particular reason, but, as blessedbyhim points out, some readers might wonder if I think enough of a stock to buy shares in real life or am just taking a gamble on CAPS.

If the word "disclosure" raises concerns, could you please suggest another word I might use instead? I certainly don't want to alarm anyone!

Member Avatar edwjm (99.87) Submitted: 11/9/2011 9:38:28 AM
Recs: 1

Now I am wondering: Why does my use of the word "disclosure" raise so many eyebrows?

No, I am not required to disclose my holding of the stock for any particular reason, but, as blessedbyhim points out, some readers might wonder if I think enough of a stock to buy shares in real life or am just taking a gamble on CAPS.

If the word "disclosure" raises concerns, could you please suggest another word I might use instead? I certainly don't want to alarm anyone!

Member Avatar blessedbyhim (35.86) Submitted: 11/29/2011 1:55:32 PM
Recs: 1

Ed, I just wanted to say that I would suggest keeping it simple. The fact that you are putting RL money behind your pick is actually information I appreciate you sharing. So, perhaps just mention that XYZ really appeals to me for X reasons, so much so I'm putting my RL money into it?

I appreciate your CAPS involvement (including this sound rationale for NLY, *note, I am disclosing I just bought some in RL ;) j/k) and look forward to the chance to talk with you. In fact, I can't see any way to contact you directly! If you're up for offering a someone who hasn't yet been as successful in CAPS (and we hope this CAPS stuff does indeed correlate positively with RL), the opportunity to bounce a few ideas off each other. I think that I'm not getting into the 90's until I learn a good deal more.

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