AGNC - I can make a case for buying it.

Posted by Zen_Vestor on March 22, 2012 (04:29PM)

PS

AGNC's next dividend is early June - a while away so you may have more chances to add to your position at reasonable prices if you didn't add today.

best of luck
Z

Posted by lego on March 22, 2012 (05:31PM)

After reading some of these posts, I started researching agnc, I discovered ARCT. Appears to be a starter in  the same business with some growth potential. I opted to buy some ARCT and am interested in every ones thoughts if any. One down fall is its new enough there doesn't seem to be any options trading.

Posted by TampaJake on March 22, 2012 (05:33PM)

I did add to my position today, but not at the low of the day. I bought around 11:30 at $29.39, but still happy with my purchase. I doesn't bother me if I don't get the low of the day or week. This is a long term position for me and my indicators said it was time to pick up some more shares. Can it go down from here? Sure ... and if it does I will probably be back for more.

My best move of the week was probably dumping IVR at $18.40 a few days before the ex-date. It is now down to 17.49 and I may come back for more sometime next week. Right now, I have 2 other stocks that I would like to purchase ahead of it.

I limit my daily activity to buying or selling only one stock as my spreadsheet gives me guidance. Some days, I don't have a play and I don't mind because I know that payday (dividends) are coming down the road.

One thing I am trying to do is limit my time on the site to 15-20 minutes during market hours. I have found myself wasting time watching my stocks and that is not the best use of my time. I will be on sometime betweem 11:00 and 2:00 to make any daily adjustments then I get off until after my work day is over.

Posted by TampaJake on April 27, 2012 (11:12AM)

Zen, Jano & others watching AGNC -

I added 23 shares at $29.39 on 3/29/12
The APR 31 Calls expired worthless so I keep the premium

Sold MAY 31 calls yesterday for $.20
Today they are at $.30 with the stock at 31.03 as I type.
At least a day early on that one.

So today I am wondering if AGNC is going to make a new 52 week high. We are about 35 days from the ex-date. I did not think we would hit the $31 mark this early. The dividend cut from $1.40 to $1.25 did not seem to deter investors from seeing the value when it was in the mid $29 range. If it hits $31.18-31.20 the time may be right to sell a few shares. Just thinking out loud.

Have a great weekend everyone. The weather here looks good for fishing in the morning.

Posted by Bayou Steve on April 27, 2012 (11:48AM)

I can't believe the run up in the last few days. I thought it was stalling out around 30.70. 4/25 i sold $31.00 covered calls for .15 and they have at least doubled in price. I will ride this until Memorial Day and then sell. It should get around 31.20. I will set an ultra low buy for when the stock goes ex-div and see if I can catch someone napping. If I don't get the buy I will just wait. Seems like this stock really gets volatile during the summer. Should be able to take advantage of that.

Good luck with the fishing, I hope to be at Grand Isle, LA.Monday to check out the beach and try to catch some trout in the surf.

Posted by TampaJake on April 27, 2012 (04:25PM)

Steve,

It took me 3 days to get the $.20 price for the calls. I too thought it was stalled at 30.70 but then it popped to 30.90 and I was able to get my price. My indicators tell me it is still a hold at the current price. My gut feeling is telling me something different but I have learned not to rely on that.

I also own AI and it is up 5%+ from where I purchased and my indicators say it is also a hold. I am fighting temptation daily.
The only thing that keeps me from selling AI is that I bought in the mid 22's before and sold it at 24.95 in just a couple of days. I will probably sell at $24 next week if it continues up and that would probably be a complete exit of the stock, whereas I would continue to hold a good part of AGNC unless it does something crazy like shoot to 32.50 or higher. In that scenario I would be a bit bummed since I sold 2 of the May 31 calls.

I too am going after trout here in the Tampa area. My friend turned me onto a sweet little area and I will kayak to where the shallow grass drops off into about 4-6 feet of water and the trout like to ambush baits.

Posted by Janosik on April 27, 2012 (08:20PM)

Trout fishing on the flats, can't beat that.  Weather has been fantastic this week.

As for AGNC, I sold awhile back at 30.00 fearing a sell off.  Can't complain about a gain, even if it was only 2%.  I'll be waiting for ex-date now that I have some free capital.

Posted by TampaJake on April 29, 2012 (07:15AM)

Jano,

Knowing when to buy and sell any stock is difficult at best. I don't worry so much about it. Having a basket of higher dividend stocks lets me use dollar cost averaging to buy at different price points. Of course I always try to get good value and that is where my spreadsheet helps me. I can compare my holdings to see what may be under or overpriced based on price vs. yield. On down market days I usually look for something to buy that is a better dividend value than the other holdings. On up market days I look to see if something is overpriced relative to the other stocks.

So far this system is working well, up about nine percentage points over the DJIA since Oct 3rd. I will have to see how I fair during any extended market decline.

Posted by spshapiro on April 29, 2012 (07:38AM)

TJ, what you describe is philosophically the same as what I look to do with option selling. ‘Contrarian investing’ works best in a volatile market, when uncertainty rules. When times are consistently good, B&H, or better Buy and Add, is more profitable. In a prolonged bear, just getting out of the way is best. Thankfully, over the long run, volatility prevails, but over the long run….    

Posted by Obama Bin'Laden on April 30, 2012 (09:13AM)

I own AGNC in my IRA.
I bought in Jan @ 28.25
Added in March @ 29.30

Currently up over 10% on it, plan to hold for a long time... and it's set to drip.

I will add to it when needed to rebalance IRA. (want about 20% in a REIT/high yield stock)

I don't ever plan on selling for minor 1-2% gains.

If I ever do sell, it's to buy another REIT, and based on the other options out there, I feel AGNC is spanking them all. I closed NLY for AGNC.

Posted by Janosik on April 30, 2012 (10:14PM)

The last few months were good for your system, TJ.  I'm curious how it works in a descending Market.  Awhile back I did pretty well with a basket of dividenders, until the Market declined and I didn't change the direction of my sails.

Posted by Obama Bin'Laden on May 02, 2012 (05:24PM)

Earnings beat, up 1.33% AH.


American Capital Agency Corp. (NASDAQ: AGNC) reported Q1 EPS of $2.66, versus $1.48 reported last year. 



http://ir.agnc.com/phoenix.zhtml?c=219916&p=irol-newsArticle&ID=1690598&highlight= 

Posted by TampaJake on May 03, 2012 (09:37AM)


Janosik said: The last few months were good for your system, TJ.  I'm curious how it works in a descending Market.  Awhile back I did pretty well with a basket of dividenders, until the Market declined and I didn't change the direction of my sails.

That is pretty much everyone's dilemma. When will the next big correction come and will we recognize it early enough to limit losses?
I don't mind volatility and 100-200 point swings. It is those consecutive extended down days that you have to watch out for.
Right now I am keeping a minimum of 13% cash but I was up to 40% when the market opened yesterday after selling my shares of AI at $23.69 on Monday afternoon for a 5.84% net gain in 33 days.

I bought some shares yesterday and now am sitting at 31.5% cash.

Posted by Bayou Steve on May 03, 2012 (10:51AM)

Hey guys,
Looks like I will need to buy back that cc which is now pretty expensive and sell pre - exdiv. Otherwise I will get assigned soon.

How much higher can this REIT go? This is not typical of REITs with such a run up.  

We did fairly well with the specks on Monday and Tuesday. All together the 3 of us caught about 36 trout and one mackerel.  

 

Posted by Bayou Steve on May 03, 2012 (10:51AM)

Hey guys,
Looks like I will need to buy back that cc which is now pretty expensive and sell pre - exdiv. Otherwise I will get assigned soon.

How much higher can this REIT go? This is not typical of REITs with such a run up.  

We did fairly well with the specks on Monday and Tuesday. All together the 3 of us caught about 36 trout and one mackerel.  

 

Posted by Obama Bin'Laden on May 03, 2012 (02:15PM)

When you sold those CCs you accepted to sell your shares at 31.15 (minus commissions).

What was your plan if it rallied  higher?
Execute that plan.

IMO, I wouldn't sell CCs against AGNC or any stable REIT. The premium is terrible compared to the potential upside.

Posted by TampaJake on May 03, 2012 (03:46PM)

Steve... I am letting my cc's ride. If the stock gets called away, so be it. I made a nice profit. We are still quite a ways from the ex-div date. Buying back covered call options is a losing proposition most of the time.

In my instance, I sold 2 of the May $31 call options for $20 less commisions for $33.69 net.  I purchased the stock for $28.29 per share. If my stock gets called I will receive approx $6195 in addition to the call premium and have a gain of $571. This does not include the dividend I received or the April calls I sold.

If I were to buy back the calls at current prices that would cost me $144.25 including commissions. There are no guarantees that the stock will continue to rise, but lets say it goes to $32 and I can sell. The sale would net me approx $6395 less the $144.25 to buy back the calls, leaving me with a difference of $6250.75 and a profit of $592.75 just slightly ahead of where I would be if the shares get called away.

The only other consideration is if my shares are called it will cost me an additional $4.95 to buy back the stock at a later date.

If I hadn't entered the covered calls in the first place I would not have sold any AGNC today. I would have wanted to, but my indicators are still saying hold. Oddly, two days ago I would have sold off about 15 shares at $31.25 but the stock missed my target and ended the day at $31.235  Go figure.

The day that I sold the covered calls Jim Cramer said on "Mad Money" that he does not like covered calls as it limits your upside.
For me, I treat the premium as extra dividend. I will not enter a covered call on AGNC in the month the dividend is paid.




Posted by TampaJake on May 03, 2012 (04:01PM)

Steve - right now it is in the best interest of the call buyer to sell the call rather than exercise. That does not mean that someone wouldn't do something irrational.

Posted by Obama Bin'Laden on May 03, 2012 (04:38PM)

The call buyer selling his call does not affect you in the least bit.

You still owe someone shares bottom line, if Person ABC or Person XYZ owns it, it doesn't matter.

Calls get exercised early at a very very low rate. I wouldn't fret.

If I were the owner of calls, I'd keep holding on, as I feel AGNC still has upside. Also, VIX is under 20 and should be for a while.

Good job TJ on your gains, I'm going to keep riding it out, up 13% since Jan, so it's like a 30% gain annualized.

Best decision I made was selling off NLY for AGNC. Frankly, I wish I sold off NLY for AGNC a lot earlier.

Posted by TampaJake on May 09, 2012 (02:03PM)

Sold off 6% of my AGNC today at $31.78 and I reentered AI at $23.02 on Monday (5/7/12). I have added a couple of others to my watchlist but no positions at this time:

GNI - looking for $60 entry
MITT - not here but I may be a buyer at $18.50
EOD - target price of $7.30, so not any time soon

The trout were a bit sluggish. Not enough tide movement. Caught 2 keepers, a couple of smalls, one keeper redfish (19 inches) and 4 stinking catfish. It got too hot and there were too many boats and jetskis so I got off the water a little after noon. I would rather fish weekdays. Tomorrow afternoon if weather permits.



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