Yesterday, American Capital Agency's (NASDAQ: AGNC ) CIO, Gary Kain, spoke at a conference and revealed further details behind his company's odd strategy of buying common shares of its competitors, like Hatteras Financial. The move has turned out to be a great one for American Capital Agency as the sector has rallied and valuation multiples have increased. So far in 2014, Hatteras Financial has given investors a total return of nearly 30%.
In the following video, Motley Fool banking analyst David Hanson discusses Kain latest comments and tells investors why American Capital Agency won't always employ this unique strategy going forward.
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