Dallas, Texas 09/10/2013 (Financialstrend) -Annaly Capital Management, Inc. (NYSE:NLY) is a United States base company which owns, manages and finances wide array of real estate related investments which denotes interests in or obligations backed by pools of mortgage loans. The Company with its wholly owned subsidiaries offers diversified services like real estate, asset management and other financial services. The company is also qualified as a real estate investment trust (REIT) under the Internal Revenue Code.
Last twelve months has been one of the worst years for this sector as a whole, and particularly for the company Annaly Capital Management, Inc. (NYSE:NLY), as its share price has dropped as much as 33% and also its dividend payout has been declined to 40% from 64 cents a quarter to a 40 cents of current quarter which is it’s decade low.
Despite of this downward trend analyst have some bullish arguments for the stock. One of its biggest reasons is insider buying: in the month of august alone few of the biggest highest ranking officers of the company including CEO and CIO purchased more than 2, 00,000 shares. There are different reasons for insiders to sale the shares but only one reason to buy that they believe that the shares are undervalues. In addition, another noteworthy point is that over the past six months there was not a single sale of shares by the insiders of the company.
Another two reasons for the strong positive bullish signals are rising 10-year bond yields which imply rising income for the company and ridiculously cheap valuation that the company bulls that it sells at a discount to book value.
In summary, company’s future depends on its ability, that how it absorbs opportunity of rise in interest rates to manage its declining value of its portfolio of mortgages. And also how its income increases as long term rates rises faster than short term rates.