Tuesday, November 19, 2013
As most of us are painfully aware, the mortgage real estate investment trusts (mREITs) have been among the weakest stocks of the last six month in an otherwise strong bull market. However, in this article I will provide evidence as to why I think things are starting to look better for my top holding in the sector, Annaly Capital Management (NLY). In fact, there are some signs that indeed this may be the case. At the most basic level, the last few weeks of the third quarter and the current fourth quarter have provided an environment that has been quite strong for the company, but understanding where the positives and negatives reside is key to deciding if the stock is a buy with defined upside at these levels. On the surface, things are looking.....READ MORE
At 45 cents a share, and a 35-40 million market cap, the stock is trading at a 85% discount to PROVEN gold reserves. This doesnt even take into account the probable, which shoots it up to a 93% discount. BUY BUY BUY HAND OVER FIST!!!!!!!!!!!!!!!!!!!!!
Saturday, November 16, 2013
Linn Energy (LINE) is primarily an oil and natural gas company, and engages in the acquisition and development of oil and natural gas properties. I have been in and out of the stock, most recently in late 2012. I still follow the headlines and read an occasional article. I recently wrote an article that gave a unique perspective in LINE's merger with Berry Petroleum (BRY) as well as the expansion of its Permian Basin properties. That article sparked a lot of discussion. I noted that there were readers clearly in the bullish camp, while others are in the bearish camp. Ultimately, I believe the company is taking the correct steps to ensure long-term stability and profitability. In the short run, there could be more pain ahead. Jim Cramer recently opined that LINE is simply too low to sell now. I couldn't disagree more with this overly simplistic view of any stock. Here is WHY.
I recently took to social media and lambasted talking heads who claim that mortgage real estate investment trusts (mREITs) are too difficult to understand. To me, it's not that hard to understand, and it won't be for you either. Some of my institutional money management friends said they have no place in a portfolio. Really? Just going to lump them in with penny stocks? No place? Well, everyone is entitled to their opinion. However, I disagree. I not only think mREITs are not that difficult to understand but I also believe that they serve a good purpose in tax favorable accounts such as IRAs and ESAs. Now, many of you are reading this and probably thinking "ok, but hasn't this sector been crushed?" The answer is yes, it has been. My followers who own American Capital Agency (AGNC) have been most concerned. Specifically, the concern rests with a ......READ MORE
Friday, November 15, 2013
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Jim Cramer is wrong. I disagree with him entirely, at least on his recent bearish call on Annaly Capital Management (NLY). Basically, the call was somewhat benign during his lightning round of his show Mad Money. When asked about NLY at current levels, he stated: "I say no. It is too difficult to understand in this taper, no taper environment." Much of the headlines and action thereafter were predicated on the belief that "NLY is too difficult to understand." I'll admit, the mortgage real estate investment trust (mREIT) sector can really be confusing to many investors who own shares in the sector. However, unlike all of my prior articles on NLY, which have focused specifically on performance, or dividend sustainability or long-term performance of NLY, in this article I want to....READ MORE
It's been a great year for the market, with the S&P 500 (SPY) closing on November 14 at a new all-time high of 1790.62 -- the 35th time its set a new high this year (Note that from 1930 through 1953 there were no new closing highs). That puts the total return of the S&P 500 at almost 28 percent. In addition to it being a great year for the market, it should be a great year for active managers -- those stock pickers who every year are seeking alpha -- as the stars certainly appear to be aligned for them to outperform. Let's see why this is....READ MORE
Thursday, November 14, 2013
Thank you Federal Reserve! For anyone not paying attention, the much awaited and market priced taper of Fed purchases was supposed to be announced this week (on 9/18) to the tune of $10-$20 billion a month. To paraphrase a childhood holiday classic, but what to my wondering eyes should appear, the announcement of no taper and sudden jubilation in the market without any fear! That's right, no taper. The Fed views the market as too weak to cut purchasing. I am in full agreement with Stan Druckenmiller who just this morning on CNBC attested that "you've gotta love gold here." But why should..........................READ MORE
In the long-term, a shortage in global supply is inevitable. We all know that higher supply eventually results in lower prices, and the global oil supply is heading that way very quickly. For years there has been chatter of so-called "peak oil." We probably have surpassed that mark, but did not factor in the possibility of new discoveries and better technology. Despite more cars are on the road, more drivers are on the road and more demand at the pump, the global oil supply is very strong right now and as such under normal economic pressures, prices should be lower or trending lower. They don't seem to be just yet, however a................READ MORE
Executive Summary: Trading at a significant discount to its regional competitors and yielding just under 5% annually, the little known Union Bankshares has grown its commercial and residential loan portfolio for five consecutive years. It has acquired competitors to strengthen its regional footprint and is rebalancing its portfolio to take advantage of the rising interest rate environment while simultaneously slashing expenses, setting the company up for continued growth over the next few years. Introduction Very small up and coming regional banks can deliver large profits when invested in early. The key....READ MORE
Sunday, July 28, 2013
American Capital Agency (AGNC) has plummeted in 2013 in response to two major concerns; the fact that the Federal Reserve may slow or cease its mortgage asset purchases sometime this year and the fear that rising interest rates will crush portfolio holdings of the mortgage real estate investment trusts (mREITS). The most recent unwarranted selling was just last Friday (7/5/13) which resulted from another better than expected jobs number showing that the market added 195,000 jobs in June. That day, when AGNC was trading down 7.5% at $20.21, I came out with a call to buy the panic selling. Since then the stock is up over 10%, with the first bounce coming shortly after the release of the article. Still, despite the evidence I have laid out in multiple articles and despite the fact that closer examination of the jobs number revealed a still gloomy view of the economy, I am inundated with inquiries as to whether it is time to just give up on AGNC altogether. While I would argue that despite AGNC shedding 1/3 of its share price since April, if you truly believe the sector is still doomed, then you could.....read more