Monday, October 29, 2012

AGNC Earnings

The markets are closed today due to hurricane Sandy. AGNC put out the report at 3:00pm.  The new Book value is $32.49 which is a rise of $3.08 from last quarter. It closed at $32 last friday so it is below book value but trading was closed today.The FED buying  securities may be part of the reason for the rise in book value. So Bernaki deciding to buy may be the cause for at least part of the rise because he drove the prices up by entering the market.  Usually it trades about 10% over book value; it will be interesting what shares will do tomorrow especially since i have more than usual shares of AGNC in my portfolio.
The bad news is they only made $.25 per share. Apparently they sold something because they record a $3.98 comprehensive income. The have $1.52 carry-over from earlier quarters. They saved money for a 'rainy day' which is something other REITs have not done. I do believe AGNC will go up tomorrow but my guess is a good as anyones as to how high. I noticed Thomas Reuters reduced the AGNC rating from positive to neutral probably due to reduced earnings. if AGNC goes to its normal price range it could hit $35.73 or in the $35s somewhere. That would be a huge rise though; it might only go up 50 cents to a dollar because of the low earnings and fears of more bad quarters. It could catch up later if things look better for REITs in general. If the price does go back to $35 it may be in 2013 or late this year. A lot of people would have to buy,  and AGNC has a lot of shares, so I dont think the price will shoot to $35.50.  The management is doing a good job protecting our share value and this will not go un-noticed. Also AGNC has announced a 500 Million share purchase of its own shares which should raise prices some. NYL has also done this recently.
    Silver is $31.78 as of 4:36. I have noticed over the years that silver and AGNC have similar values. I think people are waiting for the elections to react to things and it will be sort of slow for the next week.
    I do feel that President Obama has done a good job and that Romney would be a bad choice because Romney does not seem to have a real plan- he only wants to dismantle everything that Pres. Obama has done and there is no plan to replace everything with. The big business men who Romney supports will be free to do whatever they want because Romney has no real plan. 

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