We previously had a position in American Capital Agency Corp. (AGNC) and we noted that it went ex-dividend on June 19. We also noted that AGNC’s smaller mREIT brother American Capital Mortgage Investment (MTGE) went ex-dividend on the same date.
Before MTGE went ex-dividend, we were concerned that the company would take advantage of its market price premium in comparison to its book value and issue a secondary share offering. Now that the company’s shares are trading ex-dividend with regards to its $.90 per share quarterly dividend, we believe that the likelihood of a secondary offering is less likely to happen, since its estimated premium based on our forecasted book value as of June 30 will only be 5.39%. We believe that based on these three factors, we don’t have to worry about a secondary offering for a few months anyway.
American Capital Mortgage is another one of our favorite mREITs. The first thing we like about it is that it is managed by an affiliate of American Capital (ACAS), which also manages the mortgage book for American Capital Agency . We previously held American Capital Agency and we sold it on May 11 because we were concerned that it would issue a secondary offering of stock to take advantage of its 10% market price premium to book value.
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