+ Watch MTGE
on My Watchlist
Debt free, with up-trended insider ownership trading, below book value. Could rise above $30 if earnings only match consensus estimates.
Tar has been beaten out of this unloved cash machine. 3-4 qtrs. of stable earnings and look out.
Stock already beaten down in anticipation of rising interest rates. Huge yield of 17% and capital appreciation after rates stabilize will cause stock to outperform. Rising long term rates and low short term rates will be positive for earnings. Solid management team will be able to steer the company through the present short-term turmoil.
http://wiki.fool.com/The_Graham_Number Formula: Fair value=Sqrt(22.5*EPS*BV) I expanded it a little by also using EPS Normalized and Tangible BV My current Graham Number Valuation Range (GNVR) for MTGE: $57.26 to $69.69
it being a hybrid mortgage mlp makes it less exposed to rising interest rates of the currently owned fanny/freddy assets. the fed will by 2015 begin raising the rates
Ok, some of you may know that I started a contest-http://caps.fool.com/player/foxforce5contest.aspxThe goal is to try and prove that dividend stocks are better (in most cases) over the long term, rather than high-flying pennystocks.As the rules were set up I anticipated a 50-50 mix of divi and non divi players. So far the results have panned out much like I expected. To even prove my point further, I put cold hard Moneta beans on my pick of MTGE.Yep that's right- 500 cold clams were just sitting in my brokerage, those divis add up!It's a mortgage real estate investment trust brought to you by the same folks that brought you ANGC, so management is trustable as far as you can trust when dealing with their sorts. By law they have to pay out 90% of earnings.MTGE takes on more risk, to the tune of 6.7 levered if I recall, but as long as the Bernanke is sloshing out free money I have no reason to think that this will not work out.Note (I followed all Fool disclousure policys while making this purchase) Although if you ever see TMF in front of my Caps name it's clear the Gardner brothers have taken the brown acid ;)
On 8-18-12 HCG aka me, picked this stock.
MTGE has the same management as AGNC. While MTGE is a hybrid chartered to invest in non-agency as well as agency paper, in practice MTGE is heavily weighted agency paper. MTGE is a wallflower that hasn't had the publicity of AGNC. Nor is does it have AGNC's big market cap. But MTGE is a less mature stock than AGNC and thus may have more growing room than it's older sibling.
works well in this intrest enviironment.
A tsunami of foreclosures is coming that could very well dwarf what we saw in 2010. There are 9 million homes in the foreclosure pipeline that will need to be cleared first before any housing recovery will sprout. I'm expecting the housing and mortgage markets to remain a shambles for years to come yet.
Yield curve looks good for now. I'ts time to make money in real estate again!
Run by the same folks who are doing so well with AGNC, I expect this to be a winner.
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