AGNC - AGNC: After A 50% Rally Time For A Sanity Check (Downgrade)

2024-01-27 08:30:00 ET

Summary

• AGNC Investment Corp. investors have experienced a resurgence as dip buyers capitalized on its October 2023 lows. Accordingly, AGNC has surged more than 50% from those lows.
• Paying attention to the 10-year Treasury yield is crucial for assessing attractive buy levels on AGNC. AGNC could generate massive total returns when timed well.
• AGNC's highly attractive forward dividend yield of nearly 15% suggests it should remain an income investor's core play. Expect near-term volatility as we head into the Fed's upcoming meeting.
• I explain why AGNC's hammering is likely over, as the market environment has turned more constructive this year.
• Still, I argue why I gleaned the risk/reward as more well-balanced. As a result, I consider my previous thesis as having played out as I downgrade the mREIT leader.

AGNC Investment Corp. (AGNC) dip buyers who capitalized on its October 2023 have enjoyed a resurgence, like what AGNC investors experienced as it fell to its October 2022 lows. On both occasions, the 10Y ( US10Y ) topped out at their respective levels before pulling back steeply over the next few months. I urged AGNC investors to capitalize on the bottoming signal in my previous update in mid-November, as it outperformed the S&P 500 ( SP500 ) significantly since then....

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