What did you trade today and why?

[Flieger]

I'm not seeing the strategy here with AGNC. Seems to me you are buying shares and, because the share price goes down, they repay you your own money in dividend payments. Don't you end up with little or no gains?

For example, if you bought $100K two years ago at $10 per share you would have 10,000 shares. You get paid a monthly dividend of $.12 per share, or $1,200 per month. You reinvest these dividends at falling share prices. Now, today the price is $8.00 per share. During the past two years through these dividends, you've accumulated 3,200 more shares at an average price of $9.00 per share.

If you were to sell now you would net $105,600 for a total return of $5,600 over two years, or an average annual return of 2.8%.

What am I missing?

And another way to look at it is:

2 years of $1200 monthly distributions for $28.8k, invested wherever in whatever you want, or used as income. This also ignores IF you did chose to re-invest in AGNC, this $1200 monthly distribution would increase and the $28.8k would be higher. I don't feel like doing the math right now, but you see what I am saying. If no reinvestment, you have that income at a current paper loss of $20k ($10/share to $8/share) should you sell. Buy and hold assumption, ignores any other investment gains from the monthly divs (income or capital gain), a whole lot of variables...

Everything is down right now, but no reason to believe "this time is different" and it will continue to decline and never go back up or god forbid, go to $0.

Flieger

 

[dickoncapecod]

Added some PDI near 15% and a little AGNC and WDI. Cash still about 17%.
Regards, Dick

 

[Flieger]

I'm waiting until the end of the month to see that the rest of my Div's meet "estimates" (so far so good) and will then decide on any investments/re-investments.

Flieger

 

[Qs Laptop]

And another way to look at it is:

2 years of $1200 monthly distributions for $28.8k, invested wherever in whatever you want, or used as income. This also ignores IF you did chose to re-invest in AGNC, this $1200 monthly distribution would increase and the $28.8k would be higher. I don't feel like doing the math right now, but you see what I am saying. If no reinvestment, you have that income at a current paper loss of $20k ($10/share to $8/share) should you sell. Buy and hold assumption, ignores any other investment gains from the monthly divs (income or capital gain), a whole lot of variables...

Everything is down right now, but no reason to believe "this time is different" and it will continue to decline and never go back up or god forbid, go to $0.

Flieger

Here are the quarterly net income figures for AGNC for the past year (in thousands):

3/31/24 $443,000
6/30/24 -$48,000
9/30/24 $346,000
12/31/24 $122,000

That does not look very healthy to me.

 

[Flieger]

Here are the quarterly net income figures for AGNC for the past year (in thousands):

3/31/24 $443,000
6/30/24 -$48,000
9/30/24 $346,000
12/31/24 $122,000

That does not look very healthy to me.

I don't (currently) hold it, but on their website they show a 389% return - May 2008 thru Dec 2024. Of course, that's with Div's being reinvested. Without reinvestment (price alone) shows -58% over that span.

Flieger

 

[Qs Laptop]

I don't (currently) hold it, but on their website they show a 389% return - May 2008 thru Dec 2024. Of course, that's with Div's being reinvested. Without reinvestment (price alone) shows -58% over that span.

Flieger

If they are not paying dividends out of earnings--and last year doesn't look good--then I go back to my original proposition that you send them your money and they slowly send it back to you, while the share price drops.

 

[Flieger]

If they are not paying dividends out of earnings--and last year doesn't look good--then I go back to my original proposition that you send them your money and they slowly send it back to you, while the share price drops.

Sounds like you won't be investing in this one. At 17% return, I might, especially considering the recent run down of this (and the overall market).

Flieger

 

[drs]

AGNC beats $0.44eps 0.40 expected
book value $8.25

 

[dickoncapecod]

Here are the quarterly net income figures for AGNC for the past year (in thousands):

3/31/24 $443,000
6/30/24 -$48,000
9/30/24 $346,000
12/31/24 $122,000

That does not look very healthy to me.

Right. GAAP results for 2024 were earnings of about 93c/share. Of course, AGNC is a carry/arbitrage machine with complex hedges. GAAP accounting requires requires a number of practices that can be misleading. For example, large amounts of CAPITAL changes --- realized and unrealized gains --- are run through income accounts rather than capital accounts. There are complexities with hedge income recognition and other income as well. If you go to the full earnings announcement and keep scrolling down, you'll find a handy if dense GAAP-Adjusted Earnings explanation/reconciliation. Analysts always estimate adjusted income per share to assess the function of the arbitrage machine.....hence in Q1-25, adjusted earnings of 44c beat expectations of 40c and nicely cover the current 36c/quarter monthly distributions.

 

[dickoncapecod]

AGNC beats $0.44eps 0.40 expected
book value $8.25

FWIW, AGNC estimated tang book lower at about 7.85 in their pre release --- unsurprising since everything was upended on Tariff Day. AGNC traded very briefly below 8.00.
Regards, Dick

 

[YellowSubmarine]

Bought a Ford 2/12/32 , 3.25% bond with EY of 7.1%. I could live my retirement on 7.1% in a very good manner. The crazy on/off equity market is just beginning as long as tariffs are in dispute. I am tired of losing 2-3% in a single day. I am not selling equities; nor am I buying until there's resolve.

 

[Montecfo]

Bought some AR following my natgas thesis. Also bought AMZN as it has gotten too cheap.

 

[copyright1997reloaded]

Started position in LNG today @ $223.24

 

[COcheesehead]

Added a few more muni bonds. Finding good values there.

 

[Quattro73]

Do you try to avoid the deminimis tax but looking for higher coupons?

 

[COcheesehead]

Do you try to avoid the deminimis tax but looking for higher coupons?

Most likely to occur with lower coupons

 

[MrMikeCT]

Added to RTX on the open. Decent reported revenue but cloudy guidance drove down the stock price.

 

[Ozz]

Late yesterday added to PDI, AGNC and OXLC.

 

[dickoncapecod]

Sold May 2 expiry 8.50 calls against my AGNC position at and average just over 12c. Thesis: assuming the calls are not executed by the buyer before 4/30 ex date, I'll receive the 12c distribution and possibly another 12c captured several days later. Worst case, the buyer executes and takes my AGNC owned at 8.20 away for 8.50.

 

[YellowSubmarine]

+ VZ added to my extra large position premarket...discounted 4.5% for a 6.5% dividend. Out of cash in my Roth.

 

[richardsok]

Bought opening position in SDIV (Global X Super Div). Recovery continues strong with hefty yield. Remain suspicious of US equities, though I have recently been buying preferreds ETFs & CEFs. Watching silver, which remains historically cheap in relation to gold, but still see no sign of catching up.

 

[AudiDudi]

<snip> Watching silver, which remains historically cheap in relation to gold, but still see no sign of catching up.

Either silver needs to rise or gold needs a big pullback. But, from what I see, Silver supply is high and demnad no so high.

 

[drs]

Either silver needs to rise or gold needs a big pullback. But, from what I see, Silver supply is high and demnad no so high.

if you think that's nutty, consider you are going to be able to buy nearly 4 ozs of platinum for every ounce of gold. Remember when platinum traded $1200 an ounce to gold's $600? I sure do....

 

[tutan]

Buy 100 shares WMT @ $94 and write 1 $89 call option expires 5/23/25 for $7.28. $2.28 gain in 31 days if WMT stays up. Don’t mind keeping WMT either if it doesn’t get called.

 

[AudiDudi]

if you think that's nutty, consider you are going to be able to buy nearly 4 ozs of platinum for every ounce of gold. Remember when platinum traded $1200 an ounce to gold's $600? I sure do....

I remember platinum trading for about 4x paladium back when I bought (mid 80's) 1oz palladium bars for $157. Shoulda sold then at $2500+