24/7 Wall St. » NLY

24/7 Wall St. Closing Bell (YUM, DMD, NLY, MS, UBS, AGU, CVS, RL, RAI, TWX, DIS, WYN, BWLD, CSCO, CZR, FFN, TNK, AKAM, NURO)

Paul Ausick — Wed, 08 Feb 2012 21:06:49 +0000

The US equity markets opened slightly higher this morning, but soon turned around and spent the rest of the morning lower before returning to about even by afternoon. Equities could close at or near where they opened today. The lack of a decision on the Greek debt swap deal is leading investors to exercise caution both in Europe and the US. If the new Greek deal is anything like the last dozen or so, it will send markets up as soon as it is announced; and once people have a chance to read the details, markets will turn south again. Crude is higher today, with WTI up 0.51% at $98.91/barrel and Brent up 1.24% at $117.67/barrel. Gold closed down -0.73% at $1,735.60/ounce.

The unofficial closing bells put the DJIA up about 6 points to 12,883.95 (0.04%), the NASDAQ rose nearly 12 points (0.41%) to 2,915.86, and the S&P 500 rose 0.22% or about 3 points to 1,349.97.

There were several analyst upgrades and downgrades today, including Yum! Brands Inc. (NYSE: YUM) cut to ‘neutral’ at Goldman Sachs; Demand Media Inc. (NYSE: DMD) cut to ‘underweight’ at Morgan Stanley; Annaly Capital Management Inc. (NYSE: NLY) cut to ‘market perform’ at FBR; Morgan Stanley (NYSE: MS) cut to ‘hold’ at Collins Stewart; and UBS AG (NYSE: UBS) cut to ‘sell’ at Deutsche Bank.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Agrium Inc. (NYSE: AGU) is up 2.16% at $82.95; CVS Caremark Corp. (NYSE: CVS) is up 1.18% at $43.59 after posting a new 52-week high of $44.08 earlier in the day; Ralph Lauren Corp. (NYSE: RL) is up 9.8% at $172.50 after posting a new 52-week high of $178.47 earlier today; Reynolds American Inc. (NYSE: RAI) is down -1.35% at $39.57; Time Warner Inc. (NYSE: TWX) is up 0.3% at $38.21 after posting a new 52-week high of $39.23 earlier today; Walt Disney Co. (NYSE: DIS) is up 0.95 at $41.34; Wyndham Worldwide Corp. (NYSE: WYN) is up 5.6% at $43.22 after posting a new 52-week high of $43.36 earlier today; and Buffalo Wild Wings Inc. (NASDAQ: BWLD) is up nearly 17% at $82.04 after posting a new 52-week high of $82.45 earlier today.

Our preview of tomorrow’s earnings releases is here. Also see our coverage of earnings for Cisco Systems Inc. (NASDAQ: CSCO) due after markets close today

Other standouts from today include the following stocks:

Ceasars Entertainment Corp. (NASDAQ: CZR) is up more than 70% at $15.32. The casino owner completed its IPO today, with 1.8 million shares going out at $9/share. We have some issues with this IPO.

FriendFinder Networks Inc. (NASDAQ: FFN) is up nearly 33% at $1.95. The adult dating site had no news today, so this must just be more halo effect from Facebook — or something else.

Teekay Tankers Ltd. (NYSE: TNK) is down more than -12% today at $3.98. The shipping company this morning priced a secondary stock offering of 15 million shares at $4/share.

Akamai Technologies Inc. (NASDAQ: AKAM) is up about 2% at $34.33. The internet company acquired a Canadian company today, and reports earnings after markets close today. We have more coverage here.

NeuroMetrix Inc. (NASDAQ: NURO) is down more than -17% at $0.95 after posting a new 52-week low of $0.94 earlier today. The medical device maker priced a secondary offering of 10.5 million shares at $1/share this morning.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

8:30 a.m. – New unemployment benefits claims
10:00 a.m. – Wholesale trade report
10:30 a.m. – EIA weekly natural gas storage report
1:00 p.m. – Treasury 30-year bond auction
4:30 p.m. – Federal Reserve balance sheet and money supply

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: AGU, AKAM, BWLD, CSCO, CVS, CZR, DIS, DMD, FFN, MS, NLY, NURO, RAI, RL, TNK, TWX, UBS, WYN, YUM

Top Analyst Upgrades & Downgrades (NLY, MT, BP, CBOE, DMD, RDY, ING, MS, NOV, OPEN, SOHU, UBS, VSH, YUM)

Administrator — Wed, 08 Feb 2012 13:18:44 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Wednesday morning.

Annaly Capital Management Inc. (NYSE: NLY) Cut to Market Perform at FBR.
ArcelorMittal (NYSE: MT) Cut to Sell at S&P Capital IQ.
BP PLC (NYSE: BP) Raised Estimates by UBS; Cut to Hold at Soc-Gen.
CBOE Holdings, Inc. (NASDAQ: CBOE) Cut to Underperform at KBW.
Demand Media Inc. (NYSE: DMD) Cut to Underweight at Morgan Stanley.
Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) Cut to Neutral at Credit Suisse.
ING Group, N.V. (NYSE: ING) Cut to Neutral at Goldman Sachs.
Morgan Stanley (NYSE: MS) Cut to Hold at Collins Stewart.
National Oilwell Varco Inc. (NYSE: NOV) raised target to $96 at Argus.
OpenTable Inc. (NASDAQ: OPEN) Cut to Perform at Oppenheimer; Cut to Neutral at Credit Suisse; Raised to Overweight at Piper Jaffray.
Sohu.com Inc. (NASDAQ: SOHU) lowered targets by Credit Suisse and Nomura.
UBS AG (NYSE: UBS) Cut to Sell at Deutsche Bank.
Vishay Intertechnology, Inc. (NYSE: VSH) Raised to Overweight at JPMorgan.
Yum! Brands Inc. (NYSE: YUM) Raised to Neutral at Goldman Sachs.

Credit Suisse makes a change to its favorite biotech list.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: BP, CBOE, DMD, ING, MS, MT, NLY, NOV, OPEN, RDY, SOHU, UBS, VSH, YUM

Top Earnings Previews For Tuesday (NLY, BP, BWLD, CERN, CHD, KO, EMR, HIG, JIVE, NTGR, OPEN, PNRA, SNCR, TM, DIS)

Administrator — Mon, 06 Feb 2012 18:24:07 +0000

We are getting into the last of the normalized quarterly earnings reports and into the first waves of the companies with off-normal quarter-ends. Tuesday is going to be another busy day with many earnings. The earnings previews are for the following: Annaly Capital Management Inc. (NYSE: NLY); Bp Plc (NYSE: BP); Buffalo Wild Wings Inc. (NASDAQ: BWLD); Cerner Corporation (NASDAQ: CERN); Church & Dwight Co. (NYSE: CHD); Coca-Cola Co. (NYSE: KO); Emerson Electric Co. (NYSE: EMR); Hartford Financial Services Group Inc. (NYSE: HIG); Jive Software Inc. (NASDAQ: JIVE); NETGEAR Inc. (NASDAQ: NTGR); OpenTable Inc. (NASDAQ: OPEN); Panera Bread Co. (NASDAQ: PNRA); Synchronoss Technologies, Inc. (NASDAQ: SNCR); Toyota Motor Corporation (NYSE: TM); and The Walt Disney Co. (NYSE: DIS).

We have compiled previews using Thomson Reuters consensus data and have added color on each if applicable.

Annaly Capital Management Inc. (NYSE: NLY) is going to be closely watched by the dividend investors because of that 13% implied dividend yield. The mortgage REIT is expected to report $0.56 per share.

Bp Plc (NYSE: BP) has recovered handily from the 2010 Deepwater Horizon disaster. This is an ADR so its earnings will be converted from U.K. Pounds… The estimate is $1.57 per share and the stock is up well over 50% from when its shares sold off so much in 2010. Keep in mind that this was a $60 stock before the Gulf of Mexico disaster.

Buffalo Wild Wings Inc. (NASDAQ: BWLD) is not so hot after the Super Bowl and we are six weeks from the next mega-event in sports. Estimates are $0.67 EPS and $210.25 million. This one remains expensive at almost 22-times full 2012 earnings expectations and it is only about $2.00 shy of a 52-week and all-time high.

Cerner Corporation (NASDAQ: CERN) is expected to report $0.53 EPS and $586.86 million in sales. At $63.20, the 52-week trading range for the healthcare information technology and support company is $53.93 to $74.39.

Church & Dwight Co. (NYSE: CHD) is expected to report $0.51 EPS and $694.32 million. At $45.50, the 52-week range is $33.83 to $47.00. This consumer products company remains at a large valuation premium to its larger consumer products rivals and it also has a much lower dividend yield.

Filed under: 24/7 Wall St. Wire, Calendar, Earnings Tagged: BP, BWLD, CERN, CHD, DIS, EMR, HIG, JIVE, KO, NLY, NTGR, OPEN, PNRA, SNCR, TM

Top Analyst Upgrades & Downgrades (NLY, ARUN, COG, KO, CREE, DRI, HPQ, HMC, LEN, PEP, KWR, SFD, VECO)

Administrator — Fri, 18 Nov 2011 13:15:03 +0000

These are some of Friday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

Annaly Capital Management, Inc. (NYSE: NLY) Cut to Market Perform at KBW.
Aruba Networks, Inc. (NASDAQ: ARUN) Raised to Buy at Janney.
Cabot Oil & Gas Corporation (NYSE: COG) named Bull of the Day at Zacks.
The Coca-Cola Company (NYSE: KO) Started as Buy at Jefferies.
Cree Inc. (NASDAQ: CREE) Started as Buy at Goldman Sachs.
Darden Restaurants, Inc. (NYSE: DRI) Cut to Equal-Weight at Morgan Stanley.
Hewlett-Packard Co. (NYSE: HPQ) Raised to Buy at Stern Agee.
Honda Motor Company (NYSE: HMC) named Bear of the Day at Zacks.
Lennar Corporation (NYSE: LEN) Cut to Neutral at Citigroup.
Pepsico Inc. (NYSE: PEP) Started as Hold at Jefferies.
Quaker Chemical Corporation (NYSE: KWR) named Value stock of the day at Zacks.
Smithfield Foods Inc. (NYSE: SFD) Raised to Outperform at Credit Suisse.
Veeco Instruments Inc. (NASDAQ: VECO) Started as Neutral at Goldman Sachs.

JON C. OGG

Filed under: Analyst Calls Tagged: ARUN, COG, CREE, DRI, HMC, HPQ, KO, KWR, LEN, NLY, PEP, SFD, VECO

Chimera Accounting Review, A Lesson For Other Mortgage REITs (CIM, NLY, AGNC, HTS, MORT)

Administrator — Tue, 15 Nov 2011 16:01:29 +0000

Chimera Investment Corporation (NYSE: CIM) is the mortgage REIT which we used to dub “the vulture mortgage REIT” because of its targets in lower-rated mortgage-backed securities. Usually a delay in a quarterly filing is not a good thing, but today that is not the case as the company clarified that the accounting review “will not affect the Company’s previously announced GAAP or economic book values, actual cash flows, dividends and taxable income for any period.” The company also noted that the quarterly filing will come “as soon as practicable.”

Without trying to draw too much in cause and effect, this could have an impact on most of the mortgage REITs if this develops as it is being accepted today. Specifically, this may bring a similar interest in shares of Annaly Capital Management, Inc. (NYSE: NLY), American Capital Agency Corp. (NASDAQ: AGNC), and Hatteras Financial Corp (NYSE: HTS). We would also look for the sector to impact the Market Vectors Mortgage REIT Income ETF (NYSE: MORT).

It was on November 10 that Chimera disclosed that the review by its outside independent accounting firm was with an analysis of the treatment under GAAP of “other-than-temporary impairments” related to investments in securities rated less than AA, non-rated non-Agency securities and other subordinate securities.

Chimera noted that it has not completed its analysis, but it did specify that it expects only immaterial adjustments to its historical financial statements in prior comparable periods. Also noted was that the effect will be a non-cash change in the GAAP accounting results and this change will not affect previously stated GAAP or “economic book values, actual cash flows, dividends and taxable income for any period.”

Another note was that the second quarter GAAP book value of $3.35 per share and economic book value of $3.08 per share will not change due to this action. As of September 30, Chimera’s GAAP book value was $3.27 per share and the economic book value was $3.01 per share. Its taxable income for the third quarter was $0.13 per share and the analysis is said to not have an impact on prior or future dividend distributions.

Chimera shares are up 7.8% at $2.76 and the last $0.13 dividend would generate a yield of nearly 19%, but mortgage REIT yields can fluctuate wildly as taxable income and distributions come and go. The fairly new Market Vectors Mortgage REIT Income ETF (NYSE: MORT) is trading up only 0.3% at $22.72 on very thin volume. Chimera is the third largest weighting of that ETF at 6.91%, but that falls a distant third with American Capital Agency Corp. (NASDAQ: AGNC) at 13.17% and with Annaly Capital Management Inc. (NYSE: NLY) having nearly a 19.7% weighting of the entire ETF.

Annaly Capital Management, Inc. (NYSE: NLY) is often tied to Chimera because of its past and because of management teams and its shares are actually down 0.5% at $16.23. American Capital Agency Corp. (NASDAQ: AGNC) is also down 0.5% at $27.85 and Hatteras Financial Corp (NYSE: HTS) is down 1% at $25.61. All sport double-digit implied dividend yields if the payouts remain static.

This review brought on a rating update on Chimera by Credit Suisse with a reiterated “Outperform” rating and a $3.50 price target objective. Credit Suisse went on to note that Chimera trades at a 15% discount to book value and that its yield before the pop was 20.4%. The end result is that this would begin to ease investor concerns as shares had fallen from $2.80 down to almost $2.50 in recent days before the recovery.

Usually investors tend to run for cover when they see accounting changes. So far, that is not the case with Chimera as investors are taking the company at face value. If everything represented is as-is, then Chimera is trading under its implied book values and that may be cushion enough for investors. Stay tuned.

JON C. OGG

Filed under: Accounting, Dividend, Housing, REIT, Restatements, SEC, Shareholder Issues Tagged: AGNC, CIM, HTS, MORT, NLY

24/7 Wall St. Closing Bell (GMCR, LULU, NLY, M, HSY, CYAN, GSL, IVN, JCP, LOW, ZBB, DQ, BXG, PAY, SHZ, CADX, JKS)

Paul Ausick — Mon, 14 Nov 2011 21:05:08 +0000

Shares only briefly broke above last week’s close today, as decliners outnumber gainers by about 4 to 1 in the late afternoon. Tech stocks held up fairly well early as news of Warren Buffet’s buy of IBM stock probably boosted sentiment for tech shares. By early afternoon, though, even the tech-heavy NASDAQ by more than 20 points. Crude oil fell below $95/barrel before coming back to just over $98/barrel, about $1/barrel below the opening price. Gold is also down slightly and the euro is down against the dollar. Financials have lost the most today, about 2.45% an hour before closing.

The unofficial closing bells put the DJIA down more than 74 points to 12,079.29 (-0.61%), the NASDAQ fell more than 21 points (-0.80%) to 2,657.22, and the S&P 500 fell -0.94% or nearly 12 points to 1,251.88.

There were several analyst upgrades and downgrades today, including Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) cut to ‘hold’ at Argus. Other changes included Lululemon Athletica Inc. (NASDAQ: LULU) reiterated ‘neutral’ with a $59 price target at Credit Suisse; Annaly Capital Management, Inc. (NYSE: NLY) started as ‘overweight’ at JPMorgan; Macy’s Inc. (NYSE: M) named ‘Bull of the Day’ at Zack’s; and Hershey Co. (NYSE: HSY) cut to ‘hold’ at Argus.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Cyanotech Corp. (NASDAQ: CYAN) is up more than 9% at $5.50; Global Ship Lease Inc. (NYSE: GSL) is down almost -17% at $1.75; Ivanhoe Mines Ltd. (NYSE: IVN) is up more than 2% at $21.03; J.C. Penney Co. (NYSE: JCP) is down almost -3% at $32.93; Lowe’s Companies Inc. (NYSE: LOW) is up more than 1.5%, at $23.49; and ZBB Energy Corp. (AMEX: ZBB) is down about -7.5%, at $0.71.

Several other standouts from today are as follows…

Daquo New Energy Corp. (NYSE: DQ) is down about -3%, at $2.73. The company makes wafers for solar PV cells and badly missed expected earnings. Net margins have fallen from 36.3% in the same period a year ago to 20.3%.

Bluegreen Corp. (NYSE: BXG) is up more than 44%, at $2.94. The resort time-share company has agreed to be acquired by BFC Financial Corp. (OTC: BFCF) for shares of BFC valued at $4.56.

Verifone Systems Inc. (NYSE: PAY) is up nearly 8%, at $44.03. Verifone has agreed to acquire a Norwegian company that is the largest provider of payment and gateway services in northern Europe. The price totals about $815 million, including debt.

China Shen Zhou Mining & Resources, Inc. (NYSE: SHZ) is up more than 18%, at $2.57. The company, which is China’s leading producer of fluorite, reported that it had nearly doubled revenues in the third quarter compared to the same period a year ago.

Cadence Pharmaceuticals, Inc. (NASDAQ: CADX) is down nearly -22%, at $3.97, after posting a new 52-week low of $3.95 earlier today. The company announced a $75 million secondary stock offering this morning.

JinkoSolar Holding Co. Ltd. (NYSE: JKS) is down more than -13%, at $6.75. The solar panel maker significantly reduced shipment and revenue forecasts for the third quarter.

Stay tuned for Tuesday. St. Louis Federal Reserve Bank president James Bullard and Chicago Fed president Charles Evans are giving speeches in the morning. Three other Fed presidents are also speaking tomorrow. Here’s a list of other noteworthy events (all times Eastern):

7:45 a.m. – ICSC-Goldman Sachs store sales report
8:30 a.m. – Producer price index released
8:30 a.m. – October retail sales
8:30 a.m. – Empire State manufacturing survey
10:00 a.m. – Business inventories

Paul Ausick

Filed under: Analyst Calls, HI/LOW, Market Close Tagged: BXG, CADX, CYAN, DQ, GMCR, GSL, HSY, IVN, JCP, JKS, LOW, LULU, M, NLY, PAY, SHZ, ZBB

Top Analyst Upgrades & Downgrades (AMGN, AMLN, NLY, BAM, GBX, GMCR, HSY, LULU, M, CRM, SPR, TK, TWGP)

Administrator — Mon, 14 Nov 2011 13:39:02 +0000

These are some of Monday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

Amgen Inc. (NASDAQ: AMGN) Cut to Market Perform at Leerink Swann.
Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) Raised to Outperform at Baird.
Annaly Capital Management, Inc. (NYSE: NLY) Started as Overweight at JPMorgan.
Brookfield Asset Management (NYSE: BAM) Cut estimates at Credit Suisse.
The Greenbrier Companies (NYSE: GBX) named Value stock of the day at Zacks.
Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) Cut to Hold at Argus.
Hershey Co. (NYSE: HSY) Cut to Hold at Argus.
Lululemon Athletica Inc. (NASDAQ: LULU) Reiterated Neutral with $59 target at Credit Suisse.
Macy’s, Inc. (NYSE: M) named Bull of the Day at Zacks.
Salesforce.com (NYSE: CRM) Raised to Buy at Citigroup.
Spirit AeroSystems Holdings (NYSE: SPR) Added to US 1 List at BofA/ML.
Teekay Corporation (NYSE: TK) Cut estimates at Credit Suisse.
Tower Group, Inc. (NASDAQ: TWGP) named Bear of the Day at Zacks.

Also read the top analyst calls of the last week.

JON C. OGG

Filed under: Analyst Calls Tagged: AMGN, AMLN, BAM, CRM, GBX, GMCR, HSY, LULU, M, NLY, SPR, TK, TWGP

24/7 Wall St. Top Analyst Calls of the Week (AWK, NLY, ARMH, INTC, BAC, C, JPM, CAT, DAL, DNDN, DMND, HGSI, OPEN, SNDK, VLO, VICL, YRCW)

Administrator — Sat, 05 Nov 2011 11:15:03 +0000

Each morning 24/7 Wall St. issues a list of some of the key analyst upgrades, downgrades, and initiations seen from Wall Street research firms. We review these and other calls from the week to see which stand out the most. Some are great calls that were greatly insightful. Other calls may be relevant well into the future. And then there are some calls which turned out to be total duds that were very painful for the analysts who made them and to the traders that listened.

After reviewing and filtering all of these research reports, we end up with the top analyst calls of the week. The top analyst calls of the week were in the following stocks: American Water Works Company, Inc. (NYSE: AWK); Annaly Capital Management, Inc. (NYSE: NLY); ARM Holdings PLC (NASDAQ: ARMH); Intel Corporation (NASDAQ: INTC); Bank of America Corporation (NYSE: BAC); Citigroup, Inc. (NYSE: C); J.P. Morgan Chase & Co. (NYSE: JPM); Caterpillar Inc. (NYSE: CAT); Delta Air Lines (NYSE: DAL); Dendreon Corporation (NASDAQ: DNDN); Diamond Foods, Inc. (NASDAQ: DMND); Human Genome Sciences Inc. (NASDAQ: HGSI); OpenTable, Inc. (NASDAQ: OPEN); SanDisk Corporation (NASDAQ: SNDK); Valero Energy Corporation (NYSE: VLO); Vical Inc. (NASDAQ: VICL); and YRC Worldwide Inc. (NASDAQ: YRCW).

American Water Works Company, Inc. (NYSE: AWK) was down on Friday, but earlier in the week it was added to the #1 Strong Buy List at Zacks. Despite its performance and valuations, we still see this one as a favorable stock for most investment portfolios.

Annaly Capital Management, Inc. (NYSE: NLY) saw shares slide this last week but we had an analyst duel. Wells Fargo raised Annaly to Outperform on Thursday, but Ladenburg Thalmann cut the rating to Neutral from Buy.

ARM Holdings PLC (NASDAQ: ARMH) was given a much better upside call against Intel Corporation (NASDAQ: INTC) by BMO Capital Markets mid-week, but this call goes against what the consensus analyst group is calling for. BMO raised ARM to Outperform and simultaneously downgraded Intel to Market Perform in the call.

Banking Sector Alert: On Tuesday afternoon came a bank sector downgrade by S&P Capital IQ, where Bank of America Corporation (NYSE: BAC), Citigroup, Inc. (NYSE: C) and J.P. Morgan Chase & Co. (NYSE: JPM) were both downgraded to “Hold” from “Buy.” On Wednesday morning Credit Suisse actually raised Citigroup, Inc. (NYSE: C) to “Outperform” and it gave a $48 price target.

Caterpillar Inc. (NYSE: CAT) was one of the few infrastructure players given a positive call by a new round of research calls by Morgan Stanley this last Wednesday. The firm started Caterpillar with an “Overweight” in a call which was cautious among many infrastructure and farming equipment makers.

Filed under: Analyst Calls, The Week Tagged: ARMH, AWK, BAC, C, CAT, DAL, DMND, DNDN, HGSI, INTC, JPM, NLY, OPEN, SNDK, VICL, VLO, YRCW

Top Analyst Upgrades & Downgrades (NLY, BSX, CECO, CLX, CNH, DNDN, FCX, HXL, HSP, MDT, COL, SWIR, STJ, SLF, TEVA, TDW, WYN)

Administrator — Thu, 03 Nov 2011 12:34:47 +0000

These are some of Thursday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

Annaly Capital Management, Inc. (NYSE: NLY) Raised to Outperform at Wells Fargo.
Boston Scientific Corp. (NYSE: BSX) Started as Outperform at Credit Suisse.
Career Education Corp. (NASDAQ: CECO) Cut to Underperform at BofA/ML.
Clorox Corp. (NYSE: CLX) Cut to Underperform at BofA/ML.
CNH Global N.V. (NYSE: CNH) named as Value stock of the day at Zacks.
Dendreon Corporation (NASDAQ: DNDN) Cut to Neutral at Goldman Sachs.
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) Started as Overweight at Barclays.
Hexcel Corporation (NYSE: HXL) Cut to Neutral at BofA/ML.
Hospira Inc. (NYSE: HSP) cut to Underperform ar Bear of the Day at Zacks.
Medtronic Inc. (NYSE: MDT) Started as Outperform at Credit Suisse.
Rockwell Collins Inc. (NYSE: COL) Cut to Underperform at BofA/ML.
Sierra Wireless Inc. (NASDAQ: SWIR) downgraded at Raymond James and Morgan Keegan.
St. Jude Medical (NYSE: STJ) Started as Neutral at Credit Suisse.
Sun Life Financial Inc. (NYSE: SLF) Cut to Underperform at Credit Suisse.
Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) Raised to Overweight at Morgan Stanley.
Tidewater Inc. (NYSE: TDW) Cut to Hold at Argus.
Wyndam Worldwide (NYSE: WYN) named Bull of the Day at Zacks.

JON C. OGG

Filed under: Analyst Calls Tagged: BSX, CECO, CLX, CNH, COL, DNDN, FCX, HSP, HXL, MDT, NLY, SLF, STJ, SWIR, TDW, TEVA, WYN

Mortgage REITs Trying To Recapture Lost Ground (NLY, AGNC, HTS, CIM, IVR, MORT)

Administrator — Thu, 06 Oct 2011 13:55:03 +0000

The mortgage REIT sector is trying to make a comeback after many lost 10% or more of their value from last week to the start of this week as many issues are hanging over it. A lack of refinancings, how ‘operation twist’ affects the yield curve, a poor housing market, and the fear of the future tax status are just some of the overhanging issues here. The good news, as Bank of America Merrill Lynch noted in its key sector downgrade one month ago, is that the tax issue is not likely to come to a head in the immediate future. The bad news is that the last week has not been kind to a sector where investors reach for the highest dividend yields possible.

It was just over one-month ago that we noted how BofA/Merrill Lynch downgraded 6 of the 12 major mortgage REIT stocks to Neutral from Buy. The big call at the time was that the tax overhang might make these trade closer to book value. We are seeing some small indicated gains right around the open this morning after many have continued to bounce. We have to refer to an “implied dividend” rather than a true dividend because the payouts usually depend mostly on the earnings from quarter to quarter and earnings in mortgage-REITs are difficult to predict.

Annaly Capital Management, Inc. (NYSE: NLY) is trading up by 0.5% after closing at $15.68 and after breaking under $15.00 this week. Still, the 52-week range is $14.05 to $18.79. The latest implied dividend yield: 15.2%.

American Capital Agency Corp. (NASDAQ: AGNC) is up 0.3% after a $26.38 close but shares were down close to $23.00 at the lows this week after having been above $27.00 last week. The 52-week range is $22.03 to $30.76 and the implied dividend yield is now north of 20%.

Hatteras Financial Corp (NYSE: HTS) is flat at $23.90 and shares broke under $23.00 earlier this week during the peak of the panic. This stock was close to $25.50 last week and the 52-week range is $22.33 to $31.98. The implied dividend yield is almost 17%.

Chimera Investment Corporation (NYSE: CIM), which we call the vulture mortgage REIT, is up 0.4% at $2.58 and the 52-week range is $2.38 to $4.36. The implied dividend on last look was close to 20%.

Invesco Mortgage Capital Inc. (NYSE: IVR) is up over 1% in early trading at $14.11, and this went well under $13.00 early on Tuesday and the 52-week range is $12.55 to $24.07. The implied dividend is now close to 23%.

The fairly new Market Vectors Mortgage REIT Income ETF (NYSE: MORT) is still down around $21.40 and shares briefly broke under $20.00 this week. We only have one real dividend payment so far, but the implied dividend on this ETF is close to 13%. The post-launch trading range is $19.83 (yesterday) to $26.50 and that should show how the whole sector has been slammed so hard.

Again, these dividend yields are simply “implied” because they can rise and fall and picking the trend is hard to identify from REIT to REIT.

JON C. OGG

Filed under: Dividend, REIT Tagged: AGNC, CIM, HTS, IVR, MORT, NLY