American Capital Offers Shares - Analyst Blog
24 Juni 2011 - 3:30PM
Zacks
American Capital Agency
Corp. (AGNC) recently issued a public
offering of 43.2 million shares worth approximately $1.2 billion.
The offering is expected to close on June 28, 2011. In a bid to
cover over-allotments, the company will provide a 30-day option to
the underwriters for purchasing an additional 6.5 million
shares.
American Capital intends to utilize
the proceeds generated from the transaction for acquiring other
agency securities and general
corporate purposes.
This public offering will enable
the company to attain financial flexibility and seize investment
opportunities and acquisitions, which go a long way in enhancing
top-line growth. As of March 31, 2011, American Capital’s cash
position stood at $300.6 million.
During the first quarter American
Capital reported earnings of $1.48 per share compared to $2.13 in
the year-earlier quarter. Excluding one-time items, recurring net
income for the reported quarter was $1.30 per share.
American Capital is a real estate
investment trust (REIT) that focuses on investments in mortgage
pass-through securities and collateralized mortgage obligations
(CMOs). American Capital invests only in fixed-rate agency
securities where payments are guaranteed by the U.S. government or
government-owned entities.
The company’s focused investment
approach is not distracted by originations, servicing, or credit
risk from investments in mortgages that do not have the backing of
the U.S. government.
American Capital currently retains
a Zacks #3 Rank, which translates into a short-term Strong Hold
rating. We are also maintaining our long-term Neutral
recommendation on the stock. One of its competitors, MFA
Financial, Inc. (MFA) currently retains a
Zacks #3 Rank.
AMER CAP AGENCY (AGNC): Free Stock Analysis Report
MFA FINANCIAL (MFA): Free Stock Analysis Report
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