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Annaly Capital Management, Inc. (NLY), American Capital Agency Corp. (AGNC) & American Capital Mortgage Investment Crp (MTGE): Has This Mortgage REIT Wunderkind Lost His Touch?

Things are looking better this quarter
American Capital Mortgage Investment Crp (NASDAQ:MTGE) also took a hit, but its non-agency portfolio made up for some of the losses suffered by the agency paper. Both REITs experienced a decrease in book value, and the spread dropped from last quarter’s 2.07% to 2.01% for the hybrid trust, while its agency-only cousin lost 11 basis points, down to 1.52% from the fourth quarter’s 1.63%.

Kain has said that the bullishness around the economy has abated somewhat this quarter, and that American Capital Agency Corp. (NASDAQ:AGNC) is seeing its book value begin to rise again as chatter regarding an early exit from QE3 calms. Additionally, specified mortgages performed particularly poorly in the first quarter as higher interest rates took their toll. Kain notes that the company likes these particular pools as a way of controlling prepayment risk, which has been a key part of American Capital Agency’s approach. On the positive side, however, these products have also been gaining strength.

Will the two mREITs under Gary Kain’s care bounce back by next quarter? Time will tell, as usual — especially for American Capital Agency Corp. (NASDAQ:AGNC). I’m betting, however, that investors have seen the last secondary offering from Gary Kain’s neck of the woods — for a while, at least.

The article Has This Mortgage REIT Wunderkind Lost His Touch? originally appeared on Fool.com.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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