We found a bullish paper on AGNC Investment Corp. (AGNC) on Stock Picker’s Corner’s Substack by Stock Picker’s Corner. This article summarizes the bulls’ arguments regarding AGNC. AGNC Investment Corp.’s stock was trading at $9.94 as of October 24th. According to Yahoo Finance, AGNC’s trailing P/E and forward P/E were 26.16x and 4.93x, respectively.
A close-up of a real estate portfolio highlighting the REIT’s internally managed investments.
AGNC Investment Corp. is a real estate investment trust (REIT) focused on mortgage securities that has emerged as a noteworthy opportunity for income investors in today’s turbulent times. The stock is currently trading at $10.20, offering a respectable yield of 14.23%. The stock has soared recently on expectations for a Fed rate cut that would widen AGNC’s net interest spread and ease funding pressure.
Income investors face significant challenges in the current market environment, which author James White aptly described as a “tsunami of maturity.” Borrowers may benefit as the Federal Reserve looks set to cut interest rates at its next meeting, but savers and income investors remain vulnerable. This impending “tsunami” refers to approximately $950 billion in high-yield certificates of deposit (CDs) that are due to mature in October, forcing investors to reinvest at lower interest rates. This is just the first wave. An estimated $2.5 trillion in deposits are maturing over the next year, and $8.9 trillion in government debt is also seeking reinvestment opportunities. This amounts to a staggering $12.5 trillion reinvestment tsunami, hitting retail investors the hardest. In this situation, the importance of effective income investing becomes clear. An income portfolio provides a steady cash flow for expenses and can serve as capital for future investments.
The approaching “reinvestment tsunami” is likely to drive investors towards AGNC’s attractive yield, further amplified by the company’s share buyback program, which could reduce available shares and push the stock price further higher. There is sex. Additionally, AGNC’s consistent monthly dividends and federal requirement to distribute 90% of taxable income also make AGNC even more attractive. Although there are risks, particularly with high yields and fluctuations in book value, the combination of potential interest rate reversals and solid cash reserves positions AGNC as an attractive income investment in the current environment.
AGNC Investment Corp. doesn’t even make the list of 31 most popular stocks among hedge funds. According to our database, 19 hedge fund portfolios held AGNC at the end of the second quarter, compared to 19 in the prior quarter. While we recognize the risks and potential of AGNC as an investment, we believe some AI stocks are more likely to deliver higher returns and do so in a shorter time frame. Masu. If you’re looking for AI stocks that are more promising than CL, but are trading at less than 5x P/E, check out our report on the cheapest AI stocks.
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