Brent Nyitray has 18+ years of experience in the investment industry, primarily focused on the Real Estate Sector at a variety of hedge funds, including Elliot Management and Dellacamera Capital Management. Until 2004, Brent was a Managing Director at Bear Stearns, responsible for the European Risk Arbitrage trading desk in London. Brent earned an MBA in 1994 from the Simon Graduate School of Business with a 3.9 GPA. He was formerly a US Naval Officer.
Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.
This report will probably hold the hawks on the Fed at bay and allow them to continue to maintain ultra-low interest rates. That said, the bond market has been pricing in a tapering of quantitative easing.
The NAHB Wells Fargo Housing Market Index, which measures homebuilder sentiment, peaked at 71 during the height of the housing bubble in late 2005. It bottomed out at 8 in early 2009.
QE increased the size of the Fed’s balance sheet almost eightfold since the turn of the century. Currently, the Fed’s balance sheet holds around $4.5 trillion.
Some Fed members argued that while unemployment is low, the overall labor utilization rate is low. The Fed has more work to do to achieve full employment.
We’ll look at the MAE clause of the Post Properties and Mid-America Apartment merger agreement. We’ll see how Mid-America could walk away from the deal.
Lately, mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen over the past month, while mortgage rates have been steady.
Everbank is a major player in the mortgage origination space. TIAA is looking to take some of that mortgage origination and put it on its balance sheet.
There are two basic types of state foreclosure laws—judicial and non-judicial. In non-judicial states, foreclosures are handled through a streamlined process.
Lately, mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen in the past month, while mortgage rates have been steady.
Annaly positioned itself to reduce its interest rate risk and increase its credit risk. Since 2009, global bond markets have risen in value by about $17 trillion.
Annaly Capital leverages its portfolio with repurchase agreements. Annaly Capital’s repurchase agreements fell from $54.4 billion to $53.9 billion in 2Q16.
Annaly Capital reported core earnings of $0.29 per share in 2Q16. Wall Street analysts expected $0.29 per share—earnings were in line with the expectations.
On July 28, 2016, Oracle (ORCL) and NetSuite (N) announced a merger. Oracle will purchase NetSuite for $109 per share, or $8.6 billion net of cash and debt.
NetSuite agreed to a non-solicitation agreement with a fiduciary out. This means that during the pendency of the merger, NetSuite may not contact other potential buyers.
Oracle (ORCL) co-founder Larry Ellison and his family control 45% of NetSuite (N) stock. So it’s theoretically possible but not likely that a company could make a hostile bid.
With most mergers, the rate of return is driven by the time it takes to finalize the transaction. For Oracle (ORCL) and NetSuite (N), the timeline will be driven by the antitrust waiting period.
American Capital Agency declared a dividend of $0.60 per share for the quarter. It didn’t change from $0.60 per share declared during the fourth quarter.
American Capital Agency’s book value per share rose from $22.09 in 1Q16 to $22.22 in 2Q16—the first increase in the book value per share in six quarters.
Last week, bond yields fell by 12 basis points as global bonds sold off. Stocks gained on the risk-on trade. Markets still expect the Fed to do nothing next week.
May’s 5.6% year-over-year gain in home prices has put the FHFA (Federal Housing Finance Agency) House Price Index at about 4% above its April 2007 level.
Lately, mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen over the past month, while mortgage rates have been steady.
The FOMC meets on July 26 and 27. Two weeks ago, it was a non-event. The market has been raising its estimates for the federal funds rate by the end of 2016.
Fannie Mae’s monthly National Housing Survey asked respondents if it’s a good time to buy and sell a house. They’re more confident that it’s a good time to sell.
Arbitrageurs will certainly be interested in setting up the ARM Holdings (ARMH) spread, especially if they can get an 8% return using the ordinary shares.
Softbank decided to waive any antitrust or regulatory conditions to the transaction. It doesn’t care if the regulators have issues—it’s buying the company.
There are two basic types of state foreclosure laws—judicial and non-judicial. In non-judicial states, foreclosures are handled through a streamlined process.
Ginnie Mae and the TBA market The Fannie Mae TBA (to-be-announced) market represents the usual conforming loan—the plain Fannie Mae or Freddie Mac 30-year mortgage. When a mortgage banker makes a Veterans Affairs or Federal Housing Authority loan, that loan is securitized and put into a Ginnie Mae TBA. The biggest difference between Fannie Mae […]
Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market started when it pushed rates lower to allow people to refinance.
We’ll look at the MAE (material adverse effect) clause of the WhiteWave (WWAV) merger agreement and see under which circumstance the buyer (Danone) can walk away from the deal.
According to the MAE (material adverse effect) clause of the Starz-Lions Gate deal, legislation that limits intellectual property protection wouldn’t be considered a MAE.
In the merger deal between Lions Gate Entertainment (LGF) and Starz (STRZA), the MAE (material adverse effect) clause lays out the circumstances under which either party can back out of the transaction.
Starz agreed to a non-solicitation agreement with a fiduciary out. During the pendency of the merger, it can shop itself or contact other potential buyers.
On June 30, Starz (STRZA) and Lions Gate (LGF) announced a merger. Before the deal closes, Lions Gate will split into voting shares and non-voting shares.
Last week was pretty light in terms of economic data, but markets were concerned with adjusting to the Brexit vote. For all the worries about Brexit overseas, it simply won’t have much of an effect on US corporate earnings.
Mortgage refinance applications, as measured by the MBA (Mortgage Bankers Association) Refinance Index, fell last week. Since mid-2013, refinances have been dropping dramatically.
Mortgage applications fell 2.6% last week after rising 2.9% the week before. Rates were increasing for most of the week, only to fall on Friday on the Brexit vote.
In this part of the series, we’ll look at the MAE clause of the Amsurg (AMSG) merger agreement with Envision Healthcare (EVHC) and how Amsurg could back out of the deal.
In April, the Case-Shiller Index rose by 1% month-over-month. It’s up by 5.4% YoY. Prices are still about 10% below the peak set in the summer of 2006.
After closing the prior week at 1.6%, bond yields, as tracked by the iShares 20+ Year Treasury Bond ETF (TLT), fell by 5 basis points to 1.6% last week.
April’s 5.9% year-over-year gain for home prices has put the FHFA (Federal Housing Finance Agency) House Price Index at about 3% above its April 2007 level.
For 2Q16, KB Home reported revenues of $811 million, which easily topped the Wall Street estimate consensus of $750 million. Revenues increased by 30% YoY.
In the risk arbitrage world, a 2.8% annualized return is pretty small. There’s some overlap that could concern regulators. The main risk would be the timing risk.
Microsoft paid a 50% premium to LinkedIn’s June 10 closing price. At 7.5x revenues and 75x EBITDA, Microsoft is paying a lot. LinkedIn is a unique property.
