Mortgage REITs Get A Lift From Wells Fargo (NLY, IVR, AGNC, RWT, STWD, CIM)

Tickerspy’s Mortgage REITs Index

MORTGAGE REITS INVESTING IDEAS

• Popular long ideas: NLY, AGNC, CIM
• Popular short ideas: FNMA, FMCC, DRL
• Top dividend plays: AGNC, MTGE, AMTG
• Pro favorites: NLY, AGNC, STWD

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MORTGAGE REITS COVERAGE

Investors in mortgages and mortgage-backed securities (MBS)

• Debt Ceiling Debate Creates Opportunity Mortgage REITs, KBW Says (NLY, HTS, CMO, IVR, BRT, CYS, NRF)
• Annaly Shares Slump Another News Of Another Offering (NLY, AGNC, HTS, IVR, MFA, RWT, STWD)
• Yield Roundup: Three Sectors With Above Average Yields (AGNC, WHX, TNH, CPLP, GNI, CYS)

MORTGAGE REITS CHART

MORTGAGE REITS METRICS

Avg. Market Cap:	$2.3B
Avg. P/E Ratio:	9.9
Avg. Div Yield:	8.9%

Shares of Annaly Capital Management (NLY), the largest U.S. mortgage REIT, are higher by half a percent after Wells Fargo initiated coverage of the stock with a “market perform” rating and a valuation range of $16-$17, which is below where the shares currently trade. Still, Annaly’s performance is helping the Mortgage Investment Stocks Index to a 0.9% gain.

“We consider Annaly to be the bellwether in the Agency REIT sector due to (1) having the strongest track record (2) expertise across a broad range of markets (3) and our expectation for steady economic returns,” Wells Fargo said. The bank put an EPS estimate of $2.51 for 2011 and $2.36 for 2012 on Annaly.

Shares of Invesco Mortgage Capital (IVR) are up 2% after Wells Fargo initiated coverage of that name with an “outperform” rating and a valuation range of $21-$23, which at the high end, offers moderate upside to where the stock trades today. The bank said it sees potential total return of 20%-25% over the next 12-18% on Invesco Mortgage placed 2011 and 2012 EPS estimates on the stock of $4.04 and $4.

Elsewhere in the Index, shares of American Capital Agency (AGNC) are higher by 1% as are shares of Redwood Trust (RWT) and Starwood Property Trust (STWD). Chimera Investment (CIM) is up 2%.

Investors can track the Mortgage Investment Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

Tags: AGNC, CIM, IVR, NLY, RWT, STWD