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Annaly Capital Continues to Perform Well

Feb 22 2008

Annaly Capital Continues to Perform Well

This is a difficult market. Agricultural Chemicals work some days, Mosaic (MOS) is the one I have mentioned before but can't see getting into until the market breaks to the upside. Gold works some weeks, with Barrick Gold (ABX) and Newmont Mining (NEM) being my favorites. Banks move on certain days, State Street (STT) and Northern Trust (NTRS) I have recommended before. But overall this is a really tough market with next to nothing working on a continued basis.

More evidence of how bad this market is, is the new high list versus the new low list of the New York Stock Exchange and the Nasdaq. Today the NYSE has 14 new highs while having 92 new lows. Today the NASDAQ has 6 new highs and 157 new lows. (Clearstation Tag  & Bad: http://clearstation.etrade.com/cgi-bin/events?Cmd=techev). Before it's safe to buy the momentum stocks again, these ratios need to reverse.

Then there's Annaly Capital (NLY). This mid-sized mortgage investment company out of New York is only $0.50 off it's 52-week high. This company has stayed away from the sub-prime mortgage investments that have disrupted the operations of many banks and mortgage investment companies. The stocks has risen 48% over the past year.

Annaly also invests in real estate and is taxed as a Real Estate Investment Trust. New York real estate is one of the regions that has not had the downturn the rest of country is experiencing.

The dividend is a great 6.60%, beating almost all CD and savings rates across the country. Annaly has a Price/Earnings ratio of 16. But it also has a revenue growth rate of 162% for the current year. Analysts continue to raise their earnings guidance for the company. Over the past 90 days, the 6 analysts that follow the stock have raised the company's average earnings forecast for the current year from 1.95 to 2.63.

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