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Western Asset Mortgage Capital (WMC)

Western Asset Mortgage Capital Corporation is a real estate investment trust that invests in, acquires and manages a diverse portfolio of assets consisting of Residential Whole Loans, Commercial Loans, Non-Agency CMBS, Non-Agency RMBS, GSE Risk Transfer Securities and to a lesser extent Agency RMBS, Agency CMBS and ABS. The Company's investment strategy may change, subject to the Company's stated investment guidelines, and is based on its manager Western Asset Management Company, LLC's perspective of which mix of portfolio assets it believes provide the Company with the best risk-reward opportunities at any given time. The Company is externally managed and advised by Western Asset Management Company, LLC, an investment advisor registered with the Securities and Exchange Commission and a wholly-owned subsidiary of Franklin Resources, Inc. Please visit the Company's website at www.westernassetmcc.com.

WMC stock data

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

9 Aug 22
29 Sep 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 16.14M 16.14M 16.14M 16.14M 16.14M 16.14M
Cash burn (monthly) 8.99M 4.38M (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 26.92M 13.13M n/a n/a n/a n/a
Cash remaining -10.79M 3M n/a n/a n/a n/a
Runway (months of cash) -1.2 0.7 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
30 Jun 22 Robert W. Lehman Common Stock, par value $0.01 per share Grant Acquire A No No 0 200,000 0 200,000
24 Jun 22 Fox Edward D Common Stock, par value $0.01 per share Grant Acquire A No No 0 54,264 0 136,413
24 Jun 22 Kripalani Ranjit M Common Stock, par value $0.01 per share Grant Acquire A No No 0 54,264 0 125,806
24 Jun 22 Mitchell M Christian Common Stock, par value $0.01 per share Grant Acquire A No No 0 54,264 0 130,490
24 Jun 22 Lisa Quateman Common Stock, par value $0.01 per share Grant Acquire A No No 0 54,264 0 100,009
6.8% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 42 0 NEW
Opened positions 42 0 NEW
Closed positions 0 61 EXIT
Increased positions 0 0
Reduced positions 0 0
13F shares Current Prev Q Change
Total value 15.77M 0 NEW
Total shares 13.03M 0 NEW
Total puts 212.3K 0 NEW
Total calls 26.9K 0 NEW
Total put/call ratio 7.9
Largest owners Shares Value Change
Beach Point Capital Management 4.17M $5.05M NEW
Vanguard 2.53M $3.06M NEW
BLK Blackrock 1.23M $1.49M NEW
Almitas Capital 1.14M $1.38M NEW
Centiva Capital 579.56K $701K NEW
Geode Capital Management 549.74K $665K NEW
Millennium Management 539.78K $653K NEW
Victory Capital Management 319.4K $386K NEW
Susquehanna International 262.16K $317K NEW
Renaissance Technologies 221.2K $268K NEW
Largest transactions Shares Bought/sold Change
Beach Point Capital Management 4.17M +4.17M NEW
Vanguard 2.53M +2.53M NEW
BLK Blackrock 1.23M +1.23M NEW
Almitas Capital 1.14M +1.14M NEW
Centiva Capital 579.56K +579.56K NEW
Geode Capital Management 549.74K +549.74K NEW
Millennium Management 539.78K +539.78K NEW
Victory Capital Management 319.4K +319.4K NEW
Susquehanna International 262.16K +262.16K NEW
Renaissance Technologies 221.2K +221.2K NEW

Financial report summary

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Risks
  • The ongoing COVID-19 pandemic and measures intended to prevent its spread have had and may continue to have a material adverse effect on our business, results of operations, liquidity and financial condition.
  • We may not be able to successfully operate our business or generate sufficient revenue to make or sustain distributions to our stockholders.
  • We may change any of our strategies, policies or procedures without stockholder consent.
  • Increases in interest rates could adversely affect the value of our investments and cause our interest expense to increase, which could result in reduced earnings or losses and negatively affect our profitability as well as the cash available for distribution to our stockholders.
  • Changes to, and the replacement of LIBOR may adversely affect interest expense related to our loans and investments.
  • We cannot assure you that our internal controls over financial reporting will consistently be effective.
  • Cybersecurity risk and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our financial results.
  • A lack of liquidity in our investments may adversely affect our business.
  • An economic recession and declining real estate values could impair our assets and harm our operations.
  • The commercial mortgage loans underlying the CMBS and our Commercial Loans we may acquire are subject to defaults, foreclosure timeline extension, fraud and commercial price depreciation and unfavorable modification of loan principal amount, interest rate and amortization of principal, which could result in losses to us.
  • If our Manager overestimates the loss-adjusted yields of our CMBS investments, we may experience losses.
  • If we do not control the special servicing of the mortgage loans included in the CMBS in which we invest and, in such cases, the special servicer may take actions that could adversely affect our interests.
  • Our investments are recorded at fair value, and quoted prices or observable inputs may not be available to determine such value, resulting in the use of significant unobservable inputs to determine value.
  • Declines in value of the assets in which we invest will adversely affect our financial position and results of operations, and make it more costly to finance these assets.
  • Interest rate mismatches between our RMBS and Whole Loans backed by ARMs or hybrid ARMs and our borrowings used to fund our purchases of these assets may cause us to suffer losses.
  • Prepayment may adversely affect our profitability.
  • We may incur losses as a result of unforeseen or catastrophic events, including the emergence of a pandemic and acts of terrorism.
  • We may make investments in non U.S. dollar denominated securities, which will be subject to currency rate exposure and risks associated with the uncertainty of foreign laws and markets.
  • We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to make distributions to all stockholders.
  • Loss of our exemption from regulation pursuant to the 1940 Act would adversely affect us.
  • Compliance with our 1940 Act exemption will limit our ability to invest in certain of our target assets.
  • Our inability to access funding or the terms on which such funding is available could have a material adverse effect on our financial condition, particularly in light of ongoing market dislocations resulting from the COVID-19 pandemic.
  • Fluctuations in interest rates could materially affect our financial results
  • There can be no assurance that our Manager will be able to prevent mismatches in the maturities of our assets and liabilities.
  • We may be subject to margin calls under our master repurchase agreements, which could result in defaults or force us to sell assets under adverse market conditions or through foreclosure.
  • If a counterparty to our repurchase transactions defaults on its obligation to resell the underlying security back to us at the end of the transaction term, or if the value of the underlying security has declined as of the end of that term, or if we default on our obligations under the repurchase agreement, we will lose money on our repurchase transactions.
  • If a counterparty to one of our swap agreements or TBAs defaults on its obligations, we may incur losses.
  • Failure to procure adequate repurchase agreement financing, which generally have short terms, or to renew or replace repurchase agreement financing as it matures, would adversely affect our results of operations.
  • Our repurchase agreement financing may require us to provide additional collateral and may restrict us from leveraging our assets as fully as desired.
  • Lenders may require us to enter into restrictive covenants relating to our operations.
  • Our rights under repurchase agreements may be subject to the effects of the bankruptcy laws in the event of the bankruptcy or insolvency of us or our counterparties under the repurchase agreements.
  • An increase in our borrowing costs relative to the interest that we receive on our portfolio investments may adversely affect our profitability and cash available for distribution to our stockholders.
  • Our investments in Residential and Commercial Whole Loans are difficult to value and are dependent upon the ability to finance, refinance and securitize such investments. The inability to do so could materially and adversely affect our liquidity and earnings and limit the cash available for distribution to our stockholders.
  • We may enter into hedging transactions that could expose us to contingent liabilities in the future.
  • Hedging against interest rate exposure may adversely affect our earnings, which could reduce our cash available for distribution to our stockholders.
  • Our Board of Directors has approved very broad investment guidelines for our Manager and does not approve each investment and financing decision made by our Manager.
  • There are conflicts of interest in our relationship with our Manager that could result in decisions that are not in the best interests of our stockholders.
  • We are dependent on our Manager and its key personnel for our success.
  • The Management Agreement with our Manager was not negotiated on an arm's-length basis, may not be as favorable to us as if it had been negotiated with an unaffiliated third party and may be costly and difficult to terminate.
  • Our Manager's management fee is payable regardless of our performance.
  • Our Manager is subject to extensive regulation as an investment advisor, which could adversely affect its ability to manage our business.
  • We may pay taxable dividends in our common stock and cash, in which case stockholders may sell shares of our common stock to pay tax on such dividends, placing downward pressure on the market price of our common stock.
  • The market price and trading volume of our common stock may vary substantially.
  • Investing in our common stock may involve a high degree of risk.
  • Common stock eligible for future sale may have adverse effects on our share price.
  • We have not established a minimum distribution payment level and we cannot assure you of our ability to pay distributions in the future.
  • Future offerings of debt or equity securities, which would rank senior to our common stock, may adversely affect the market price of our common stock.
  • Conversion of our convertible senior unsecured notes may dilute the ownership interest of existing stockholders, including holders who had previously converted their notes.
  • Our authorized but unissued shares of common and preferred stock may prevent a change in our control.
  • Ownership limitations may restrict change of control or business combination opportunities in which our stockholders might receive a premium for their shares.
  • Provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and Delaware law may have the effect of preventing or hindering a change in control and adversely affecting the market price of our common stock.
  • We may pay distributions from offering proceeds, borrowings or the sale of assets to the extent that distributions exceed earnings or cash flow from our operations.
  • If we do not qualify as a REIT or fail to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our stockholders.
  • Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
  • REIT distribution requirements could adversely affect our ability to execute our business plan.
  • Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.
  • Complying with REIT requirements may cause us to liquidate or forgo otherwise attractive opportunities.
  • We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.
  • Certain apportionment rules may affect our ability to comply with the REIT asset and gross income tests.
  • The "taxable mortgage pool" rules may increase the taxes that we or our stockholders may incur, and may limit the manner in which we effect future securitizations.
  • Our ability to invest in and dispose of "to be announced" securities could be limited by our election to be subject to tax as a REIT.
  • The failure of securities subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT.
  • Liquidation of assets may jeopardize our REIT qualification or create additional tax liability for us.
  • Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
  • Qualifying as a REIT involves highly technical and complex provisions of the Code.
Management Discussion
  • Due to the continued uncertainty surrounding the COVID -19 pandemic our results of operations continued to be impacted and for the years ended December 31, 2021 and December 31, 2020 may not be comparable. The full impact of COVID-19 on our results of operations is still uncertain as it depends on several factors beyond our control including, but not limited to (i) the duration and spread of the virus and its variants of the outbreak, (ii) the availability, acceptance and effectiveness of vaccines, (iii) the pandemic’s impact on the U.S. and global economies, (iv) the timing, scope and effectiveness of additional governmental responses to the pandemic, (v) the timing and speed of economic recovery, and (vi) the negative impact on our borrowers, asset values and cost of capital.

Content analysis

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Positive
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Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Avg
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