Shares of AGNC Investment Corp (AGNC 0.97%) are down 13% so far this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, after the company announced worrisome preliminary third-quarter results.
On AGNC Investment's falling book value
AGNC Investment is a real estate investment trust (REIT) that primarily invests in residential mortgage-backed securities, and the valuation of its stock is closely tied to the underlying value of its investment portfolio and its per-share book value.
In a press release issued before the market opened Monday, AGNC announced the value of its investment portfolio at the end of Q3 was approximatley $59.3 billion, up from $58 billion at the midpoint of the year. The company also revealed its tangible book value as of Sept. 30, 2023 was estimated to be $8.08 per share -- down from $9.39 per share as of June 30, 2023 -- while its "net spread and dollar-roll income" (essentially adjusted/non-GAAP earnings) should be around $0.65 per share. The latter figure was technically slightly ahead of analysts' consensus estimates for net spread and dollar-roll income of $0.62 per share.
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Is AGNC stock a buy now?
Given recent market volatility, however, the company also told investors its estimated tangible net-book value as of Oct. 20, 2023 had fallen even further to between $6.80 and $7.00 per common share, or to between $6.68 and $6.88 per common share after deducting its $0.12 per-share dividend payment declared earlier this month.
AGNC is set to release its final Q3 results this coming Monday, Oct. 30, 2023. You can be sure the market will be watching closely not only for updates on AGNC's Q3 performance but also elaboration from management on its plunging book value going forward given current difficult market conditions.
For now, until there's more clarity to that end, it's hard to blame some investors for taking a step back from AGNC stock this week.
