Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track record of the firm behind them -- so individuals can make better investing decisions.
In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 115,000 members, many of whom demonstrate better investing insight than published analysts do.
Enough top-performing CAPS members have turned bullish on Annaly Capital Management (NYSE: NLY ) recently to upgrade it from its long held two-star rank to a more formidable three stars. A total of 1,039 members have weighed in on the real estate investment firm, with many of them offering analysis and commentary explaining the recent optimism.
With the mortgage-related mess claiming AIG, Washington Mutual (NYSE: WM ) , and then Wachovia (NYSE: WB ) , it seems like the real estate meltdown is claiming another new victim each day. As a holder of mortgage securities, Annaly has certainly felt the effects of the financial markets' current conditions, but also has some tailwinds in its favor.
Annaly and banks like Bank of America (NYSE: BAC ) and Wells Fargo (NYSE: WFC ) , may actually benefit from the Fannie Mae (NYSE: FNM ) and Freddie Mac (NYSE: FRE ) bailout. The government backing provides lower funding costs for Annaly and an opportunity for increased spreads for increased profits. It would also benefit from any potential further interest rate cuts from the Fed.
The profits from its Fannie and Freddie guaranteed securities helped Annaly profit from the pain in second quarter net income of $308 million, or $0.60 per share, which is double the $0.30 per share in the prior year. It's also paying out double what it paid in dividends for the same period last year, currently yielding more than 15%. While many investors have completely written off mortgage-related investments, 87% of the CAPS members rating Annaly Capital Management expect it to outperform the market.
To see what the very best CAPS analysts are saying now about Annaly Capital Management -- as well as other winning stocks they are picking -- head on over to CAPS and have a look.
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On Oct. 7, 2008, Fool Co-Founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. In the coming weeks, the team, relying heavily on proprietary CAPS "community intelligence" data, will establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.
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