Why These Mortgage REITs are Losing Today

NEW YORK (TheStreet) -- Annaly Capital Management  (NLY) dragged down mortgage real estate investment trust (REIT) stocks Thursday after reporting weaker-than-expected third-quarter profit.

Annaly Capital plummeted 5% to $11, PennyMac Mortgage (PMT) shed 4.8% to $21.81, Chimera Investment Corp (CIM) dropped 0.33% to $3.02 and American Capital Agency (AGNC) was 0.48% lower to $21.69.

Annaly, a real estate investment firm, posted net income of 28 cents a share on revenue of $551.68 million. While earnings missed estimates by 6 cents, revenue trumped the $392.24 million expected by analysts surveyed by Thomson Reuters.

"Given the ongoing monetary policy impacts on the mortgage market and the uncertainty surrounding the future path of policy, we remain measured in our investment strategy," said CEO Wellington Denahan in a statement. "Our diversification into commercial assets is building momentum, with commercial investments up approximately 30% and now representing 11% of our capital."

Annaly Capital

TheStreet Ratings team rates Annaly Capital Management as a Hold with a ratings score of C+. The team has this to say about their recommendation:

"We rate Annaly Capital Management (NLY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."

American Capital Agency

TheStreet Ratings team rates American Capital Agency Corp as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate American Capital Agency Corp (AGNC) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and a generally disappointing performance in the stock itself."

PennyMac Mortgage

TheStreet Ratings team rates PennyMac Mortgage Invest as a Hold with a ratings score of C+. The team has this to say about their recommendation:

"We rate PENNYMAC MORTGAGE INVEST TR (PMT) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Chimera Investment Corp

TheStreet Ratings team rates Chimera Investment Corp as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate Chimera Investment Corp (CIM) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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