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CYS Investments, Inc. Board of Directors Declares Fourth Quarter 2011 Dividend of $0.50 per Share
Cys Investments Common Stock (NYSE:CYS)
Today : Friday 9 December 2011
The Board of Directors of CYS Investments, Inc. (NYSE: CYS) (the "Company") today declared a dividend of $0.50 per share of common stock for the fourth quarter of 2011. The dividend will be paid on December 28, 2011 to stockholders of record on December 19, 2011.
About CYS Investments, Inc.
CYS Investments, Inc. is a specialty finance company that invests on a leveraged basis in residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The Company has elected to be taxed as a real estate investment trust for federal income tax purposes.
Please visit the Company's website at www.cysinv.com.
Forward Looking Statements Disclaimer
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. These forward-looking statements relate to the payment of the dividend. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us, including those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which has been filed with the Securities and Exchange Commission. If a change occurs, these forward-looking statements may vary materially from those expressed in this release. All forward-looking statements speak only as of the date on which they are made. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
People keep getting spooked about interest rates. Several of the REITS have lowered their quarterly dividends because of losses, and CYS is one of them. If you go to DIVIDEND.COM, you can look at their payout history. CYS still makes the list on one of the highest payouts, but the MMs like a few smaller ones and their officers better. Funny though, those companies they push only pay about 14%. As the REITS go, I hold CYS, RSO, and ARR. RSO has yet to drop their divie, and can't hold out forever. ARR is VERY attractive, IMO, because they pay out monthly divies, even though they just dropped from 12 cents a month to 11. But it does make it easier to "get out" if it looks like the Feds are going to raise interest rates, instead of buying in and having to wait 3 months for divie payout. That monthly check is nice.
The European banks being in trouble now, doesn't help CYS and the others at all, investors don't know how much the REITS are tied to those banks, plus they think the Euro Bank problem will spread to here.
CYS Investments, Inc. has added a news release to its Investor Relations website.
Title: CYS Investments, Inc. to Present at the FBR 2011 Fall Investor Conference
Date(s): 15-Nov-2011 5:02 PM
Sorry If I seem like a jack hole :P I am new to stocks and I notices that this has an unusually high dividend .. Why wouldn't everyone buy this stock? Or Is there some type of catch
No major Fed moves expected as economy shows gains
By MARTIN CRUTSINGER - AP Economics Writer | AP WASHINGTON (AP) — Let's wait and see.
That's likely to be the message from the Federal Reserve on Wednesday, when its two-day policy meeting ends. Few expect any bold new steps to be announced.
Fed policymakers likely want to gauge the impact of action they've taken recently to keep interest rates low. The Fed has breathing room because the economy and stock markets have strengthened enough to allay fears of another recession.
After their September meeting, the policymakers said they would shuffle the Fed's investment portfolio to try to further reduce long-term interest rates. And in their previous meeting in August, they had said they plan to keep short-term rates near zero until at least mid-2013 unless the economy improved.
"They know they are running out of tools, so they don't want to employ another one unless they have to," said David Wyss, former chief economist at Standard & Poor's.
At its last meeting, the Fed left open the possibility of taking additional action to try to help the economy. One option is to further explain the steps it has already taken and their purposes. Another would be to launch a third program of bond purchases.
But the Fed remains deeply divided over what, if any, action to take, which is another reason economists don't expect any major announcements this week.
The actions taken in August and September were adopted on 7-3 votes, the most dissents in nearly 20 years.
Three regional bank presidents — Richard Fisher of Dallas, Charles Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis — all voted no. They have expressed concerns that the Fed's policies could lead to high inflation later.
On the other hand, four policymakers are worried that the Fed might not be doing enough. Vice Chair Janet Yellen, Governor Daniel Tarullo, Chicago Fed President Charles Evans and New York Fed President William Dudley have said the economy is at risk and might need more support.
"I have never seen the Fed more deeply divided than it is at this moment," said David Jones, head of DMJ Advisors and the author of books on the Fed.
At its meeting in September, the Fed stopped short of expanding its portfolio of investments. Instead, it opted to shuffle $400 billion of its investments to try to lower long-term rates.
But two officials pushed for bolder action, according to minutes of the meeting. The members discussed more bond-buying. Some said it should remain an option.
A brighter outlook for the economy has given the Fed more room to wait. The economy grew at an annual rate of 2.5 percent in the July-September period — the best quarterly performance in a year.
That's strong enough to show that the economy isn't about to slide into recession. Still, growth would have to be nearly twice as high — consistently — to make a major dent in the unemployment rate, which has been stuck at 9.1 percent for three straight months.
Stocks have rallied of late. Even after a drop of nearly 2.5 percent Monday, the Standard & Poor's 500 stock index in October notched its best one-month showing since December 1991.
European leaders have also announced a debt agreement that could help prevent a financial catastrophe on the continent. Still, even if it does, many analysts don't think Europe can avoid another recession.
Many economists think the Fed will hold off on new action until its December meeting or early next year. The next step could be further clarity on its interest-rate policy.
Evans has proposed that the Fed set benchmarks for raising rates. For example, it could agree not to raise short-term rates until unemployment fell below 7 percent or the outlook for inflation exceeded 3 percent. The unemployment rate has hovered around 9 percent for more than two years, and the Fed's inflation outlook is under 2 percent.
Yellen, who heads a Fed panel that is examining ways to improve the central bank's communications, says the idea should be examined. But she cautioned that such benchmarks could confuse investors.
She has suggested that the Fed could add further guidance when it provides its economic forecasts four times a year. The forecast offers estimates for growth, unemployment and inflation. It does not forecast interest rates.
Mark Zandi, chief economist at Moody's Analytics, said that adding a Fed forecast on the federal funds rate, its main policy lever, would reassure investors about when it might move interest rates.
"They have given investors more clarity about the timing of future rates, but including an actual forecast of when rates might change would help bring rates down further," Zandi said.
YAHOO NEWS
CYS says it is a party to a couple of MF GLOBAL holdings trade agreements
A Form 10-Q regarding CYS Investments, Inc. has been filed with the United States Securities and Exchange Commission.
CYS Investments, Inc. Announces Third Quarter 2011 Financial Results (See website for full financial disclosure info, I have only copied the highlights)Cys Investments Common Stock (NYSE:CYS)
Today : Wednesday 19 October 2011
CYS Investments, Inc. (NYSE: CYS) (“CYS” or the “Company”) today announced financial results for the quarter ended September 30, 2011.
Third Quarter 2011 Highlights
•GAAP net income of $96.3 million, or $1.16 per diluted share.
•Core Earnings of $34.5 million, or $0.42 per diluted share.
•A component of the Company’s net income for the quarter was $8.1 million, or $0.09 per diluted share, of appreciation on forward settling purchases (also referred to as “drop income”) that was accounted for as net gain from investments on our statement of operations and therefore excluded from our Core Earnings.
•Operating expenses of 2.33% of average net assets. Included in the operating expenses of $9.8 million were $4.9 million of non-recurring expenses relating to the accelerated vesting of shares of restricted stock and other expenses associated with the internalization of management. These non-recurring expenses represented $0.06 per diluted share or 0.46% of average net assets during the third quarter of 2011.
•September 30, 2011 net asset value of $12.98 per share after declaring a $0.55 dividend per share on September 9, 2011.
•Interest rate spread net of hedge of 1.95%.
•Weighted average amortized cost of Agency RMBS of $102.42.
Internalization
On September 1, 2011, the Company acquired certain assets and entered into agreements to internalize the Company’s management (the “Internalization”). The Company had previously been managed by Cypress Sharpridge Advisors LLC (the “Manager”) pursuant to a management agreement (the “Management Agreement”). The Manager had entered into sub-advisory agreements with Sharpridge Capital Management, L.P. (“Sharpridge”) and an affiliate of The Cypress Group, pursuant to which the Manager was provided with all of the resources and assets (the “Assets”) used to operate the Company’s business and manage the Company’s assets. In connection with the completion of the Internalization, the Management Agreement, sub-advisory agreements and other ancillary agreements related thereto were terminated without the payment of any termination fee. Under the terms of the Asset Purchase and Sale Agreement entered into in connection with the Internalization, the Company acquired the Assets from Sharpridge for a purchase price of $750,000 in cash. Additionally, all employees of Sharpridge as of August 31, 2011 have been hired by the Company. In connection with the execution of his employment agreement, our Chief Executive Officer received 150,000 shares of restricted stock on September 1, 2011 that will vest ratably over a five year vesting period, with one-fifth of the shares vesting on each of the first five anniversary dates of the grant date. In addition, the Company accelerated the vesting of our Chief Executive Officer’s outstanding shares of restricted stock issued prior to September 1, 2011, so that all such shares were vested and non-forfeitable on August 31, 2011, immediately prior to the completion of the Internalization. In connection with the Internalization, the Company changed its name from “Cypress Sharpridge Investments, Inc.” to “CYS Investments, Inc.” on September 1, 2011.
Third Quarter 2011 Results
The Company had net income of $96.3 million during the third quarter of 2011, or $1.16 per diluted share, compared to net income of $99.4 million, or $1.20 per diluted share, in the second quarter of 2011. During the third quarter of 2011, the Company had Core Earnings of $34.5 million, or $0.42 per diluted share, compared to $41.5 million, or $0.50 per diluted share, in the second quarter of 2011. Core Earnings represents a non-GAAP financial measure and is defined as net income (loss) excluding (i) net realized gain (loss) on investments and termination of swap contracts and (ii) net unrealized appreciation (depreciation) on investments and swap and cap contracts. The quarter-over-quarter decrease in Core Earnings was generally the result of the tightening of mortgage spreads and the costs associated with the Internalization. For the third quarter of 2011, our interest rate spread net of hedge decreased to 1.95% from 2.23% for the second quarter of 2011. During the third quarter of 2011, we had $8.4 billion of average settled Agency RMBS compared to $7.7 billion during the second quarter of 2011.
The Company utilizes forward settling transactions for the majority of its purchases. The benefit of purchasing assets in forward settling transactions is that the Company can purchase assets with specified stipulations such as average loan size and percentage of loans in a particular state. This customization allows the Company to better manage prepayments. In addition, forward settling purchases allow the Company to obtain an asset at a discount (also referred to as “drop”) to its current market value; however, the Company does not receive any interest income on the asset until the forward transaction settles. Obtaining the asset at a discount to market value reduces the impact of prepayments and is accretive to net asset value.
Drop income is a component of our net income accounted for as net gain from investments on our statement of operations and therefore excluded from our Core Earnings. During the third quarter of 2011, the Company generated drop income of approximately $8.1 million, or $0.09 per diluted share, compared to approximately $9.3 million, or $0.12 per diluted share, during the second quarter of 2011. During the third quarter of 2011, the Company made forward purchases of approximately $1.6 billion of Agency RMBS with a weighted average drop of approximately $0.27 per $100.00 par value per month compared to approximately $0.8 billion of Agency RMBS with a weighted average drop of approximately $0.25 per $100.00 par value per month during the second quarter of 2011.
The Company received $2.2 million of distributions from CLOs during the third quarter of 2011, with $1.2 million accounted for as a reduction of their cost basis and thereby excluded from our interest income and Core Earnings. This compared to distributions of $2.4 million from CLOs during the second quarter of 2011, with $1.3 million accounted for as a reduction of their cost basis.
The Company’s net asset value per share on September 30, 2011 was $12.98 after declaring a $0.55 dividend per share on September 9, 2011, compared with $12.35 at June 30, 2011. The increase was primarily the result of Agency RMBS outperforming swaps.
The Company’s operating expenses were 2.33% of average net assets for the third quarter of 2011, compared to 1.92% for the second quarter of 2011. Included in the operating expenses of $9.8 million were $4.9 million of non-recurring expenses relating to the accelerated vesting of shares of restricted stock and other expenses associated with the Internalization. These non-recurring expenses represented $0.06 per diluted share or 0.46% of average net assets during the third quarter of 2011. In connection with the execution of his employment agreement, our Chief Executive Officer received 150,000 shares of restricted stock on September 1, 2011 that will vest ratably over a five year vesting period, with one-fifth of the shares vesting on each of the first five anniversary dates of the grant date.
(dollars in thousands) Three Months Ended
Key Portfolio Statistics* September 30, 2011 June 30, 2011
Average Agency RMBS (1) $8,350,710 $7,699,364
Average repurchase agreements (2) 7,474,253 6,831,941
Average net assets (3) 1,061,373 1,013,990
Average yield on Agency RMBS (4) 3.02% 3.37%
Average cost of funds and hedge (5) 1.07% 1.14%
Interest rate spread net of hedge (6) 1.95% 2.23%
Operating expense ratio (7) 2.33% 1.92%
Leverage ratio (at period end) (8) 7.9:1 8.1:1
(1) Our average Agency RMBS for the period was calculated by averaging the month end cost basis of our settled Agency RMBS during the period.
(2) Our average repurchase agreements for the period were calculated by averaging the month end repurchase agreement balance during the period.
(3) Our average net assets for the period were calculated by averaging the month end net assets during the period.
(4) Our average yield on Agency RMBS for the period was calculated by dividing our interest income from Agency RMBS by our average Agency RMBS.
(5) Our average cost of funds and hedge for the period was calculated by dividing our total interest expense, including our net swap and cap interest income (expense), by our average repurchase agreements.
(6) Our interest rate spread net of hedge for the period was calculated by subtracting our average cost of funds and hedge from our average yield on Agency RMBS.
(7) Our operating expense ratio is calculated by dividing operating expenses by average net assets.
(8) Our leverage ratio was calculated by dividing total liabilities by net assets.
* All percentages are annualized.
Prepayments
The portfolio recorded $413.6 million in scheduled and unscheduled principal repayments and prepayments, which equated to a constant prepayment rate (“CPR”) of approximately 14.9%, and net amortization of premium of $12.8 million for the third quarter of 2011. This compared to $230.4 million in scheduled and unscheduled principal repayments and prepayments, which equated to a CPR of approximately 12.0% and net amortization of premium of $8.7 million for the second quarter of 2011.
Based on data published by Freddie Mac, mortgage rates on 30 year fixed rate mortgages fell by 40 basis points to 4.11% during the three months ended September 30, 2011. This drop in mortgage rates has caused an increase in our CPR to approximately 19.8% in October 2011.
Dividend
The Company declared a common dividend of $0.55 per share with respect to the third quarter of 2011, compared to $0.60 per share for the second quarter of 2011. Using the closing share price of $12.09 on September 30, 2011, the third quarter dividend equates to an annualized dividend yield of 18.2%. Portfolio
At September 30, 2011, the Company’s $9.4 billion portfolio of Agency RMBS was backed by fixed-rate mortgages and hybrid adjustable-rate mortgages (“Hybrid ARMs”) with 0 to 84 months to reset. Additional information about our Agency RMBS portfolio at September 30, 2011 is summarized below:
Par Value Fair Value Weighted Average
Asset Type
(in thousands)
Cost/Par
Fair
Value/Par
MTR(1)
Coupon
CPR(2)
10 Year Fixed Rate $ 288,426 $ 303,416 $ 104.06 $ 105.20 N/A 3.50 % 6.2 %
15 Year Fixed Rate 4,717,243 4,964,472 102.40 105.24 N/A 3.85 % 9.9 %
20 Year Fixed Rate 608,028 644,471 102.33 105.99 N/A 4.14 % 8.1 %
30 Year Fixed Rate 259,824 279,791 103.15 107.68 N/A 5.00 % 15.7 %
Hybrid ARMs 3,070,004 3,205,883 102.25 104.43 66.0 3.32 % 19.9 %
Total/Weighted Average $ 8,943,525 $ 9,398,033 $ 102.42 $ 105.08 66.0((3 )) 3.71 % 12.6 %
(1) “Months to Reset” is the number of months remaining before the fixed rate on a hybrid ARM becomes a variable rate. At the end of the fixed period, the variable rate will be determined by the margin and the pre-specified caps of the ARM. After the fixed period, 100% of the hybrid ARMS in the portfolio reset annually.
(2) CPR is a method of expressing the prepayment rate for a mortgage pool that assumes that a constant fraction of the remaining principal is prepaid each month or year. Specifically, the constant prepayment rate is an annualized version of the prior three month prepayment rate for those bonds held at September 30, 2011. Securities with no prepayment history are excluded from this calculation.
(3) Weighted average months to reset of our Hybrid ARM portfolio.
Financing, Leverage & Liquidity
At September 30, 2011, the Company had financed its portfolio with approximately $7.5 billion of borrowings under repurchase agreements with a weighted average interest rate of 0.28% and a weighted average maturity of approximately 33.3 days. In addition, the Company had payable for securities purchased of $0.8 billion. The Company’s leverage ratio at September 30, 2011 was 7.9 to 1. At September 30, 2011, the Company’s liquidity position was approximately $631.0 million, consisting of unpledged Agency RMBS, U.S. treasury bills and cash and cash equivalents. Below is a list of outstanding repurchase agreements at September 30, 2011 (dollars in thousands):
Counterparty Total
Outstanding
Borrowings
% of
Total
Amount
At Risk (1)
Weighted
Average
Maturity in
Days
Bank of America Securities LLC $ 250,205 3.3 % $ 13,870 19
Bank of Nova Scotia 201,194 2.7 6,266 46
Barclays Capital, Inc. 439,823 5.8 21,303 44
BNP Paribas Securities Corp 290,852 3.9 14,945 45
Cantor Fitzgerald & Co. 490,663 6.5 29,810 49
Citigroup Global Markets, Inc. 341,569 4.5 18,072 19
Credit Suisse Securities (USA) LLC 325,788 4.3 14,137 19
Daiwa Securities America, Inc. 452,711 6.0 23,197 26
Deutsche Bank Securities, Inc. 541,056 7.2 31,625 37
Goldman Sachs & Co. 438,177 5.8 24,413 18
Guggenheim Liquidity Services, LLC 48,362 0.6 2,385 53
Industrial and Commercial Bank of China Financial Services LLC 239,269 3.2 13,179 31
ING Financial Markets LLC 217,885 2.9 11,338 11
Jefferies & Company, Inc. 104,769 1.4 5,787 19
LBBW Securities LLC 177,442 2.4 9,736 52
MF Global Securities Inc. 248,138 3.3 13,738 26
Mitsubishi UFJ Securities (USA), Inc. 327,904 4.3 17,427 46
Mizuho Securities USA, Inc. 363,449 4.8 18,569 33
Morgan Stanley & Co. Inc. 182,124 2.4 10,180 45
Nomura Securities International, Inc. 454,746 6.0 24,086 45
South Street Securities LLC 378,802 5.0 22,765 53
The Royal Bank of Scotland PLC 238,285 3.2 12,094 23
UBS Securities LLC 346,386 4.6 19,335 22
Wells Fargo Securities, LLC 441,070 5.9 14,187 21
$ 7,540,669 100.0 % $ 392,444
_________
(1) Equal to the fair value of pledged securities plus accrued interest income, minus the sum of repurchase agreement liabilities and accrued interest expense.
Hedging
The Company utilizes interest rate swap and cap contracts to hedge the interest rate risk associated with the financed portion of its Agency RMBS portfolio. As of September 30, 2011, the Company had entered into 15 interest rate swap contracts with an aggregate notional amount of $4.7 billion, a weighted average fixed rate of 1.49% and a weighted average expiration of 2.6 years. At September 30, 2011, the Company had entered into three interest rate cap contracts with a notional amount of $0.7 billion, a weighted average cap rate of 1.593% and a weighted average expiration of 3.8 years. These interest rate swap and cap contracts are described below (dollars in thousands):
Interest Rate Swaps Expiration Fixed Floating Notional Fair
Counterparty
Date
Pay Rate
Receive Rate(1)
Amount
Value
The Royal Bank of Scotland plc May 2013 1.6000% 0.3143% $ 100,000 $ (1,728)
The Royal Bank of Scotland plc June 2013 1.3775% 0.3686% 300,000 (4,268)
The Royal Bank of Scotland plc July 2013 1.3650% 0.2493% 300,000 (4,304)
Goldman Sachs December 2013 1.2640% 0.3491% 400,000 (5,902)
The Royal Bank of Scotland plc December 2013 1.2813% 0.3491% 500,000 (7,526)
Goldman Sachs December 2013 1.3088% 0.3471% 400,000 (6,299)
Deutsche Bank Group December 2013 1.3225% 0.3502% 400,000 (6,416)
Deutsche Bank Group(2) April 2014 1.6700% 0.3743% 250,000 (1,483)
The Royal Bank of Scotland plc July 2014 1.7200% 0.3721% 100,000 (2,835)
Nomura Global Financial Products, Inc. July 2014 1.7325% 0.2498% 250,000 (7,232)
Deutsche Bank Group August 2014 1.3530% 0.2901% 200,000 (3,710)
Goldman Sachs September 2014 1.3120% 0.3556% 500,000 (8,692)
Deutsche Bank Group October 2014 1.1725% 0.2458% 240,000 (3,143)
Goldman Sachs February 2015 2.1450% 0.2862% 500,000 (22,296)
Nomura Global Financial Products, Inc. June 2016 1.9400% 0.3272% 300,000 (10,535)
Total $ 4,740,000 $ (96,369)
Interest Rate Caps
Expiration Notional Fair
Counterparty
Date
Cap Rate
Amount
Value
The Royal Bank of Scotland plc December 2014 2.0725 % $ 200,000 $ 819
The Royal Bank of Scotland plc October 2015 1.4275 % 300,000 3,888
The Royal Bank of Scotland plc November 2015 1.3600 % 200,000 2,855
Total $ 700,000 $ 7,562
_______________
(1) Resets quarterly to 3-Month LIBOR.
(2) Interest rate swap contains a one-time option to cancel for $0.
Conference Call
The Company will host a conference call at 9:00 AM Eastern Time on Thursday, October 20, 2011, to discuss its financial results for the quarter ended September 30, 2011. To participate in the event by telephone, please dial 800.510.9836 at least 10 minutes prior to the start time and reference the conference passcode 86986604. International callers should dial 617.614.3670 and reference the same passcode. The conference call will also be webcast live over the Internet and can be accessed at the Company’s Web site at http://www.cysinv.com. To listen to the live webcast, please visit http://www.cysinv.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software. A dial-in replay will be available on Thursday, October 20, 2011, at approximately 12:00 PM Eastern Time through Thursday, November 3, 2011, at approximately 11:00 AM Eastern Time. To access this replay, please dial 888.286.8010 and enter the conference ID number 99873670. International callers should dial 617.801.6888 and enter the same conference ID number. A replay of the conference call will also be archived on the Company’s website at http://www.cysinv.com.
About CYS Investments, Inc.
CYS Investments, Inc. is a specialty finance company that invests on a leveraged basis in residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The Company refers to these securities as Agency RMBS. CYS Investments, Inc. has elected to be taxed as a real estate investment trust for federal income tax purposes.
Forward Looking Statements Disclaimer
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. These forward-looking statements relate to our interest rate spread, net of hedge. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us, including those described in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2011 and our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which has been filed with the Securities and Exchange Commission. If a change occurs, these forward-looking statements may vary materially from those expressed in this release. All forward-looking statements speak only as of the date on which they are made. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CYS INVESTMENTS, INC.
CYS Investments, Inc. has added a news release to its Investor Relations website.
Title: CYS Investments, Inc. Announces Third Quarter 2011 Financial Results
Real Estate Investment Trusts Outlook - Oct. 2011
By: Zacks Equity Research
September 30, 2011 |AVB | PSA | TCO | HST | PLD Amid macroeconomic headwinds fueled by the continued concerns about sovereign debt issues, rising energy costs, and fears of a double-dip recession, the U.S. Real Estate Investment Trust (REIT) industry continues to outperform the market. The REIT market has been driven by an increased inflow of funds as institutional investors allocated more capital to the industry.
Investors looking for high dividend yields have favored the REIT sector. Solid dividend payouts are arguably the biggest enticement for REIT investors, as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders. The dividend yield for the FTSE NAREIT All REIT Index by the end of second quarter 2011 was 4.3%, compared to 3.2% for the 10-year U.S. Treasury Note.
The FTSE NAREIT Equity REIT Index had total returns of 3.6% in the second quarter of 2011 vs. -0.6% and -0.9% for the NASDAQ Composite and the S&P 500 Index, respectively. This performance has largely carried into the third quarter as well, though some of the sub-groups within the broader REIT universe really standout.
The standout performance in the REIT industry (year to date as of September 9, 2011) was that of the self-storage REITs (a total return of 19.18% as measured by the FTSE NAREIT Equity REIT Index), followed by apartments (16.54%) and regional malls (6.60%). The relatively underperforming sectors were lodging/resorts (-34.89%) and industrial REITs (-17.09%).
A combination of factors has helped the REIT industry stand out. During the crest-to-trough period of 2007 to 2009, REITs took on far less debt than private real estate investors, and many were able to sell at the top of the market when private equity investors were still buying.
Importantly, during the downturn, REITs were able to acquire properties from highly leveraged investors at deeply discounted prices. This enabled them to add premium high-return assets to their portfolios. Furthermore, REITs have been able to raise capital to pay off debt, making them an increasingly attractive investment proposition.
Moving forward, limited supply of new construction, coupled with the increasing demand for high-quality properties, bodes well for future earnings prospects of REITs, especially those which have assets in high barriers-to-entry markets. In terms of earnings, approximately 75% of REITs have reported in line or exceeded expectations during second quarter 2011. For full year 2011, funds from operations (FFO) for the industry are now expected to rise by 14%, up from 12% at the beginning of the year.
OPPORTUNITIES
As "echo boomers" (the children of the Baby Boomer generation) opt to move out on their own and more renters decide to part ways with family and roommates, single-family homeownership rate across the U.S. has witnessed a continuous decline and demand for multifamily rental apartments have surged. With new supply remaining muted until late 2013 or 2014, we expect the multifamily sector to remain comparatively stable in the coming quarters, as renting has emerged as the only viable option for customers who could not get mortgage loans or are unwilling to buy a house at present.
In this environment, we remain bullish on AvalonBay Communities, Inc. (AVB - Analyst Report), one of the best-positioned apartment REITs, primarily focused on developing multi-family apartment communities for higher-income clients in high barrier-to-entry regions of the U.S. AvalonBay has Class A assets located in premium markets, such as Washington DC, New York City and San Francisco, where the spread between renting and owning is still high despite home price declines.
In addition, AvalonBay has a reasonably strong balance sheet with moderate near-term debt maturities and adequate liquidity. Consequently, the company can capitalize on potential acquisition opportunities due to distressed selling from owners and developers who cannot refinance their properties, which augurs well for its top-line growth.
We are also bullish on Public Storage (PSA - Analyst Report), the largest owner and operator of storage facilities in the U.S. The company has significantly increased the scale and scope of its operations through the acquisition of Shurgard Storage Centers that had a considerable presence in the European markets. Although Public Storage currently owns a 49% stake in Shurgard, the size and scope of its operations have enabled it to achieve economies of scale, thereby generating high operating margins and managerial efficiencies.
The "Public Storage" brand is the most recognized and established name in the self-storage industry with a presence in all the major markets across 38 states in the U.S. In addition, the storage facilities of the company have a high visibility and are usually located in heavily populated areas that improve the local awareness of the brand. This provides a significant upside potential for the company.
Another stock worth mentioning is Taubman Centers Inc. (TCO - Analyst Report), which owns, develops and operates regional and super-regional shopping centers throughout the U.S. and Asia. Retail shopping centers spanning over 400,000 square feet of gross leaseable area (GLA) are generally referred to as "regional" shopping centers, while those centers having in excess of 800,000 square feet of GLA are generally referred to as "super-regional" shopping centers.
Taubman focuses on dominant retail malls that command the highest average sales productivity in the U.S., measured in terms of mall tenants’ average sales per square foot. On a trailing 12-month basis, mall tenant sales were $600 per square foot during second quarter 2011 -- a unique record for the company as well as the U.S. public regional mall portfolios.
In addition, a large number of these shopping centers are strategically located in the most affluent regions of the country, which include Los Angeles, San Francisco, Denver, Detroit, Phoenix, Miami, Dallas, Tampa, Orlando and Washington DC. This in turn enables the retailers to target high-end upscale customers and maximize their profitability.
WEAKNESSES
A significant chunk of REITs are raising capital through property level debt and equity offerings. Although both debt and equity financings provide the much-needed cash infusion, they could potentially burden an already leveraged balance sheet and dilute earnings. Property level debt is also harder to obtain and more expensive as commercial real estate prices remain under pressure.
We are bearish on Host Hotels & Resorts, Inc. (HST - Analyst Report), the largest lodging REIT and one of the largest owners of luxury and upper-upscale hotels. The majority of Host Hotels’ properties are concentrated in the luxury and upper-upscale segments, which had been the weakest performing segments during the economic downturn. While the outlook for these markets has improved, the pace of the improvement remains quite uneven and unsteady.
We also remain skeptical about Prologis Inc. (PLD - Analyst Report) -- the erstwhile AMB Property Corp. that acquires, develops, operates and manages industrial real estate space in North America, Asia and Europe. Although the quarterly results were in line with the company’s expectations and signified a gradual improvement in market fundamentals, macroeconomic issues have contributed to a slower pace of recovery.
The credit crunch has also widened the bid-ask spread between buyers and sellers of commercial real estate, which has caused deal volumes to fall comparatively. In addition, market vacancy increases will mitigate Prologis’ ability to push through rental rate increases. This has significantly affected the long-term growth of the company.
CYS Investments, Inc. Announces Conference Call to Discuss Third Quarter 2011 Results
Cys Investments Common Stock (NYSE:CYS)
Intraday Stock Chart
Today : Wednesday 5 October 2011
CYS Investments, Inc. (NYSE: CYS) (the "Company") today announced that it will host a conference call at 9:00 AM Eastern Time on Thursday, October 20, 2011, to discuss its financial results for the quarter ended September 30, 2011.
Hosting the call will be Kevin E. Grant, Chairman and Chief Executive Officer, along with other members of the Company's senior management team.
To participate in the call by telephone, please dial 800.510.9836 at least 10 minutes prior to the start time and reference the conference passcode 86986604. International callers should dial 617.614.3670 and reference the same passcode.
The conference call will also be webcast live over the Internet and can be accessed at the Company's website at http://www.cysinv.com. To listen to the live webcast, please visit http://www.cysinv.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software.
A dial-in replay of the call will be available on Thursday, October 20, 2011 at approximately 12:00 PM Eastern Time through Thursday, November 3, 2011 at approximately 11:00 AM Eastern Time. To access this replay, please dial 888.286.8010 and enter the conference ID number 99873670. International callers should dial 617.801.6888 and enter the same conference ID number. A replay of the conference call will also be archived on the Company's website at http://www.cysinv.com.
About CYS Investments, Inc.
CYS Investments, Inc. is a specialty finance company that invests on a leveraged basis in residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The Company refers to these securities as Agency RMBS. CYS Investments, Inc. has elected to be taxed as a real estate investment trust for federal income tax purposes.
BEST RELATIVE PERFORMANCE IN THE MORTGAGE REITS INDUSTRY DETECTED IN SHARES OF AMERICAN CAPITAL AGENCY (AGNC, NLY, CYS, ARR, TWO)
Share Sep 12, 2011 (SmarTrend(R) News Watch via COMTEX) -- Below are the top five companies in the Mortgage REITs industry as measured by relative performance. This analysis was compiled based on yesterday's trading activity as we search for stocks that have the potential to outperform.
American Capital Agency (NASDAQ:AGNC - Analyst Report) ranks first with a gain of 2.12%; Annaly Capital Management (NYSE:NLY - Snapshot Report) ranks second with a gain of 1.71%; and Cypress Sharpridge Investments (NYSE:CYS - Snapshot Report) ranks third with a gain of 1.01%.
Armour Residential REIT (NYSE:ARR - Snapshot Report) follows with a gain of 0.27% and Two Harbors Investment Corp (AMEX:TWO - Snapshot Report) rounds out the top five with a gain of 0.11%.
SmarTrend currently has shares of Armour Residential REIT in an Uptrend and issued the Uptrend alert on August 10, 2010 at $5.86. The stock has risen 26.8% since the Uptrend alert was issued.
Write to Chip Brian at cbrian@mysmartrend.com
SmarTrend analyzes over 5,000 securities simultaneously throughout the trading day and provides its subscribers with trend change alerts in real time. To get a free trial of our trading calls and maximize your trading results, please visit http://www.mysmartrend.com
Get exclusive, actionable insight into how the market is expected to trend prior to market open with our free morning newsletter. Sign up at: http://www.mysmartrend.com/signup
Copyright, Comtex News Network, Inc. 2011
Free Stock Analysis From Zacks
Includes Zacks Long-Term Recommendation and Target Price
¦AMER CAP AGENCY (AGNC)
¦CYS INVESTMENTS (CYS)
Zacks
schwab. mutuals cost nothing to do, stock trades are 8.95. If you're not constantly day trading, it's worth it, rather than go to cheap/no service. Especially since they having checking account, used to have VISA, point system could buy stocks. Not anymore. I'd have to check to see if ETFs are free if you're actually interested. Plus we have a consultant near us. Plus you can call for all kinds of assist.
they now have live trading, which I guess you call L2 here. It's free if you have combo million bucks in their accts. I love it. It automatically has a "news" column so you instantly get a sticky note on ANYTHING out there, could be a SEC filing, PR, up/down projections by MMs, etc. Plus set up watch list vs. what you have in acct, charts, anything you would want instant access to.
Wish I could auto reinvest :( Scottrade doesn't give me that option. What broker do you use?
ARR has been doing OK-cause they pay their divies monthly instead of qtrly, and still declare for the whole quarter, in other words, declare $.36 dividend to be paid out for Qtr 3 July, Aug, Sept, to be paid out $.12 each month.
Think it was smart move- don't have so many long dips as what can happen to qtrly payments. The monthly paycheck is very nice, too. I don't have the divie auto-reinvest so that I can catch it on dips or move it elsewhere, RSO and CYS I have on auto-reinvest
Only REITS that I have noticed doing better than CYS over the last week were AGNC and NLY.
3rd QTR dividend is down a nickel- seems someone knew that in advance- CYS has done worse than others here as of late
CYS Investments, Inc. Board of Directors Declares Third Quarter 2011 Dividend of $0.55 per Share
Date(s): 9-Sep-2011 5:01 PM
For a complete listing of our news releases, please click here
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If you are unable to click on the link above, please copy and paste the URL below into a web browser
http://ir.cypresssharpridge.com/phoenix.zhtml?c=211651&p=IROL-news&nyo=0
SEC IS SEEKING COMMENTS ON REMOVING TAX AND LEVERAGE EXEMPTIONS ON REITs: SEEKING ALPHA-Friday, September 2, 4:55 PM Mortgage REITs American Capital Agency (AGNC), Hatteras Financial (HTS), and Capstone Mortgage (CMO) have moved lower since the SEC announced on Wednesday it will seek comment on removing tax and leverage exemptions. Citi is doubtful the SEC will remove them, but cautions dividends would plunge if they do.
a follow-up comment by the SA editor: "Relax, I mentioned they had little choice in the original post. However, while these guys are not JPM or GS, they are not without political cards to play on this issue. Their support (or at least lack of howling) will be helpful."
Really think they should have called the PR- NAME CHANGE and internal revamp or something
surprised me too- was only skimming the PR which wasn't newsworthy in itself, almost didn't see it.
Johnsyn is now a mod!
Welcome to one of the quietest forums on iHUB.
Thanks - I submitted the name change. Weird to just pop a new name out of the blue after asset shifting.
CYS Investments, Inc. Announces Completion of Management Internalization
NEW YORK--CYS Investments, Inc. (NYSE: CYS) (the “Company”) today announced that it has completed the acquisition of certain assets and entered into agreements to internalize the Company’s management (the “Internalization”) as contemplated by the Company’s July 20, 2011 press release. The Company previously had been managed by Cypress Sharpridge Advisors LLC (the “Manager”) pursuant to a management agreement (the “Management Agreement”). The Manager had entered into sub-advisory agreements with Sharpridge Capital Management, L.P. (“Sharpridge”) and an affiliate of The Cypress Group, pursuant to which the Manager was provided with all of the resources and assets used to operate the Company’s business and manage the Company’s assets (the “Assets”). In connection with the completion of the Internalization, the Management Agreement, sub-advisory agreements and other ancillary agreements related thereto were terminated without the payment of any termination fee.
Under the terms of the Asset Purchase and Sale Agreement entered into to complete the Internalization, the Company acquired the Assets from Sharpridge for a purchase price of $750,000 in cash at closing.
The Company also entered into employment agreements with its current Chief Executive Officer and President, Kevin E. Grant, as Chief Executive Officer, President and Chief Investment Officer, its current Chief Financial Officer and Treasurer, Frances R. Spark, as Chief Financial Officer and Treasurer, its current Chief Operating Officer, Richard E. Cleary, as Chief Operating Officer and Assistant Secretary, and its current Secretary, Thomas A. Rosenbloom, as Executive Vice President of Business Development, General Counsel and Secretary. In connection with the execution of Mr. Grant’s employment agreement, Mr. Grant received 150,000 shares of restricted stock on September 1, 2011 that will vest ratably over a five year vesting period, with one-fifth of the shares vesting on each of the first five anniversary dates of the grant date. In addition, the Company accelerated the vesting of all of Mr. Grant’s outstanding shares of restricted stock issued prior to September 1, 2011, so that all such shares were vested and non-forfeitable on August 31, 2011, immediately prior to the completion of the Internalization. Additionally, all other current employees of Sharpridge have been hired by the Company.
In connection with the Internalization, the Company has changed its name from “Cypress Sharpridge Investments, Inc.” to “CYS Investments, Inc.” and began trading under this name on September 1, 2011. The Company’s ticker symbol on the New York Stock Exchange remains “CYS.”
About CYS Investments, Inc.
CYS Investments, Inc. is a specialty finance company that invests on a leveraged basis in residential mortgage pass-through securities for which the principal and interest payments are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. CYS Investments, Inc. has elected to be taxed as a real estate investment trust for federal income tax purposes.
Contacts
CYS Investments, Inc.
Richard E. Cleary, 617-639-0440
Chief Operating Officer
LOL... well, that's what he has to say.
Friday's economic calendar that will affect us:
8:30 GDP Q2
8:30 Corporate Profits
9:55 Reuters/UofM Consumer Sentiment
1:00 PM Bernanke: 'Near- and Long-Term Prospects for the U.S. Economy'
Same here -- just waiting for dividend season...
all my REITs took the gas today, can't find a reason.
agreed, back in the BLACK on her.
It could end up a better situation for us, I noticed ARR did not go thru the swings. One reason, IMO- they pay their divy monthly vs. qtrly. Maybe CYS will see that and do same.
Got me beat... we'll see.
Well, with the S&P downgrade, what will happen now? IMO-REITs will still be best deal in town, contracts are already in place, cannot raise interest on existing loans, only new ones, and then at most, it will be just a smidge. So that will do what at most to REIT if they go borrow more money? Drop dividend yield to 17% vs. 18%???
That'll be interesting if it happens.
As soon as they sign-buying more before pps recovers!
MOODY'S EXPECTS US. TO RETAIN AAA RATING 4:51 PM Reuters reports Moody's saying it expects a rating review of the U.S. to conclude with a AAA reaffirmation, but with negative outlook going forward, even if the Reid or Boehner bills pass. Any more warnings from the ratings agencies, and the 10 year might drop below 2.5%. MARKETWATCH/SEEKING ALPHA.COM
THOUGHT SO- it was ALL threats. All the Market Analysts are going to have to eat their words or cause the market to totally crash, interest rates up will make it worse.
Hang in there all- there's no reason to believe the scare-tactic hype interest rates are going to go up, IMO, and that is supported today by a newsletter sent out by ZACK's "C - Interest Rates Remain Very Supportive: It is hard to categorize the interest rate environment as anything but supportive given the historically low levels of short- and long-term rates. The interest rate backdrop has remained favorable even in the face of a number of dark clouds. In addition to the end of the Fed's QE2 program, the market has had to contend with the debt-ceiling debate in the U.S. and the sovereign debt issue in Europe.
Even if we explain the current under-3% 10-year Treasury yield on the flight-to-safety trade in response to soft economic data, we see little sign of stress in the corporate credit markets. Bottom line, interest rates matter to investors and the current low interest rate environment is a major key positive for the stock market." Zacks.com
Weekend Wisdom
Tactics that Work in Good Markets and Bad
Looking Past the Prevailing Dark Clouds
By: Sheraz Mian
July 30, 2011
Cypress Sharpridge Investments, Inc. Board of Directors Declares Second Quarter 2011 Dividend of $0.60 Per Share
Cypress Sharpridge Investments Common Stock (NYSE:CYS)
Intraday Stock Chart
Today : Monday 6 June 2011
Click Here for more Cypress Sharpridge Investments Common Stock Charts.
The Board of Directors of Cypress Sharpridge Investments, Inc. (NYSE: CYS) (the "Company") today declared a quarterly dividend of $0.60 per share of common stock for the second quarter of 2011. The dividend will be paid on July 27, 2011 to stockholders of record on June 22, 2011.
Also this one, less sexy but seems to be recovering.
DNI Dividend and Income Fund
Be warned... it can get ugly w/ that one. It's pref shares -- all sorts of crap can go wrong.
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CYS is a specialty finance company that was created with the objective of achieving consistent risk-adjusted investment income. We seek to achieve this objective by investing on a leveraged basis in residential mortgage pass-through securities for which the principal and interest payments are guaranteed by the Federal National Mortgage Association, or Fannie Mae, the Federal Home Loan Mortgage Corporation, or Freddie Mac, or the Government National Mortgage Association, or Ginnie Mae, and collateralized by single-family residential mortgage loans. We refer to these securities as Agency RMBS. We have elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. Our Chief Executive Officer and President, Kevin E. Grant, was a senior portfolio manager and member of the Aggregate Bond Team at Fidelity Investments, where he managed fixed income assets including the Mortgage Securities Fund, the Investment Grade Bond Fund, the Total Bond Fund, the fixed income portion of the Fidelity Puritan Fund and the Strategic Income Fund. Our investment team averages over 20 years' experience in the fields of MBS, structured finance, and corporate finance. Our portfolio managers have experience managing assets through the various interest rate and credit cycles since the early 1980s, and have the proven ability to generate risk-adjusted investment income in these environments. The Company was founded in January 2006, and is managed by Cypress Sharpridge Advisors LLC, a joint venture between Cypress CSI Advisors LLC, a sponsor of private equity funds and leveraged buyouts of U.S. companies, and Sharpridge Capital Management, L.P., a specialist fixed income asset management company founded by Kevin E. Grant, our Chief Executive Officer. Dividend History: http://ir.cypresssharpridge.com/phoenix.zhtml?c=211651&p=irol-dividends Recent Yield Data: http://www.dividendinvestor.com/?chk=572151307223246&symbol=cys&submit=GO NOTE: The Company has changed its name from "Cypress Sharpridge Investments, Inc." to "CYS Investments, Inc." and began trading under this name on September 1, 2011. The Company's ticker symbol on the New York Stock Exchange remains "CYS."
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