Anworth Mortgage Asset Shares Temporarily Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Anworth Mortgage Asset Corp. (NYSE: ANH  ) fell more than 11% in early trading before closing down less than 1%. A large share-repurchase program has offset initial fears over a lower dividend payment.

So what: First, the company announced a $0.23-per-share dividend -- $0.02 lower than in previous quarters -- at about 8:30 a.m. Eastern. Nine hours later, management announced the buyback.

Now what: To be fair, Anworth isn't the only REIT taking a beating. Annaly Capital Management (NYSE: NLY  ) and American Capital Agency (Nasdaq: AGNC  ) have also declined. But it's Anworth that's chosen to commit to repurchase up to 2 million shares in open-market transactions -- a risky bet given the sad state of the housing market. Do you agree? Would you buy shares of Anworth Mortgage at current prices? Please weigh in using the comments box below.

Interested in more info on Anworth Mortgage Asset? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 04, 2011, at 6:06 PM, tsodwyer wrote:

    Share re-po is a reasonable & desirable response by a company that will be awash with uninvestible cash arising from operation twist. This is not a 'let's issue debt to buy stock' undertaking. Leverage will increase by virtue of using principal collections to re-po stock -- instead of reinvesting in mbs paying next to nothing

  • Report this Comment On October 04, 2011, at 6:46 PM, LADET5150 wrote:

    You are wrong. ANH had a .23 cent dividend last year 3rd quarter. Do research before you spew your stupidity.

  • Report this Comment On October 04, 2011, at 10:03 PM, Timoteo57 wrote:

    The REIT's are taking a hit as of late due to 1) Operation Twist (healthy mortgages refinanced at lower rates is not good for the bottom line and 2) the Feds are reconsidering their tax status (which is basically a loophole that allows the REIT's to pass tax burden to shareholders). The "lousy" real estate market doesn't help, but I don't think it's the problem that is fueling the recent volatility and downright panic today. Please enlighten me if I am wrong. I am here to learn and am a relative newbie.

  • Report this Comment On October 05, 2011, at 2:17 AM, 4greglink wrote:

    the 0.23 cent dividend with the drop in stock price now makes the dividend payout (in % terms) even greater, added to my position this morning. BTW the stock closed UP less than 1% today not DOWN

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