Hatteras Financial CorporationHTS

Stock Research and Analysis

by Jason Ren

Externally managed by Atlantic Capital Advisors, Hatteras Financial is a mortgage real estate invest trust that invests in mortgage securities guaranteed by U.S. government-sponsored enterprises such as Fannie Mae FNM, Freddie Mac FRE, or Ginnie Mae. Read more

Bulls Say

Hatteras' investments are GSE-backed and thus carry almost no credit risk.

Since Hatteras is a REIT, it has to pay out 90% or more of its earnings in the form of dividends to shareholders. Read more

Bears Say

Hatteras has an unproven public record.

The bulk of Hatteras funding comes from repurchase agreements. Financial distresses faced by its counterparties will probably spill over and affect Hatteras' ability to borrow.

Most of Hatteras' funding is tied to LIBOR. When credit volatility spikes, LIBOR tends to divorce itself from the fed funds rate, effectively and sometimes unpredictably raising Hatteras' borrowing costs and trimming its net interest margin. Read more

Strategy

Hatteras seeks to maximize the difference between the interest income garnered on its GSE-backed adjustable-rate securities and the cost of its borrowings. It lessens its interest rate risk by varying Read more

Management

The chairman and CEO of Hatteras Financial, Michael Hough, is also the cofounder and director of Atlantic Capital Advisors, Hatteras' external manager. We can't readily determine the degree to which Hough has increased shareholder value, given the fund's Read more

Profile

Externally managed by Atlantic Capital Advisors, Hatteras Financial is a mortgage real estate investment trust that invests in adjustable-rate securities backed by government-sponsored Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

How Dodge & Cox Looks at Financials
Watch more