NEW YORK (TheStreet) -- Mortgage real estate investment trusts (REITs) were trading slightly higher on Monday, buoyed by the release of poor numbers out of the Institute for Supply Management (ISM) which is expected to push interest rates lower.
By early afternoon, Annaly Capital Management (NLY) had gained 0.74% to $10.85, Western Asset Mortgage Capital (WMC) was up 0.54% to $15.03, CYS Investments (CYS) edged 0.88% higher to $7.99, and Capstead Mortgage Corporation (CMO) added 0.32% to $12.66.
Over the year, Annaly has climbed 9%, Western Asset is up 1%, CYS Investments has added 8%, and Capstead has jumped 5%.
ISM numbers out earlier in the morning showed January U.S. manufacturing growth at its lowest point in eight months. January ISM came in at 51.3 compared to an expected 56 and December's 56.5 level. New order growth fell by the most in 33 years to 51.2 from 64.4.
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 notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANNALY CAPITAL MANAGEMENT's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 91.13%. Regardless of NLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NLY's net profit margin of 29.04% compares favorably to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has decreased by 14.4% when compared to the same quarter one year ago, dropping from $224.76 million to $192.46 million.
- Net operating cash flow has significantly decreased to $810.87 million or 77.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: NLY Ratings Report