Shorters circle around Western Asset Mortgage Capital
08 January 2014 Pasadena
Image: Shutterstock
According to reports, Zacks has recently downgraded Western Asset Mortgage Capital Corp (WMC) from neutral to underperform.
The company, which focuses on investing residential mortgage-backed securities, also featured on SunGard Astec Analytics hottest stocks from a securities lending focus.
WMC saw a surge of interest during the holiday period after announcing an unexpectedly large $2.35 joint cash/stock dividend for Q4, a move that saw its share price surge approximately 10 percent, said SunGard.
“Questions were soon asked however, and as skepticism surfaced surrounding the company’s motives, the share price actually dropped to lower than pre-announcement rates.”
“On the securities lending front, short sellers were seemingly skeptical from that start—borrowed volume climbed 16 percent as the share price jumped, but tellingly this latest retracement has not brought any significant decline in borrowing, suggesting those on that side of the market are holding on to their concerns.”
The company describes its strategy as investing in, financing and managing primarily residential mortgage-backed securities. Although its core investment strategy is focused on agency RMBS, it opportunistically supplements its portfolio with RMBS that are not guaranteed by a US government agency or US government-sponsored entity, or non-agency RMBS, commercial mortgage-backed securities and other asset-backed securities.
The company, which focuses on investing residential mortgage-backed securities, also featured on SunGard Astec Analytics hottest stocks from a securities lending focus.
WMC saw a surge of interest during the holiday period after announcing an unexpectedly large $2.35 joint cash/stock dividend for Q4, a move that saw its share price surge approximately 10 percent, said SunGard.
“Questions were soon asked however, and as skepticism surfaced surrounding the company’s motives, the share price actually dropped to lower than pre-announcement rates.”
“On the securities lending front, short sellers were seemingly skeptical from that start—borrowed volume climbed 16 percent as the share price jumped, but tellingly this latest retracement has not brought any significant decline in borrowing, suggesting those on that side of the market are holding on to their concerns.”
The company describes its strategy as investing in, financing and managing primarily residential mortgage-backed securities. Although its core investment strategy is focused on agency RMBS, it opportunistically supplements its portfolio with RMBS that are not guaranteed by a US government agency or US government-sponsored entity, or non-agency RMBS, commercial mortgage-backed securities and other asset-backed securities.
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