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Update: Does American Capital Mortgage's Performance Justify My Best-Of-The-Best Call?

American Capital Mortgage Investment (NASDAQ:MTGE) has just announced its fourth quarter results, and the numbers have an impact to my thesis. The numbers were pretty good, and I will discuss them and the changes to the key metrics you need to be aware of. The company reported net income of $16.7 million, or $0.33 per common share. This includes all unrealized gains and losses on investment and hedging portfolios. What is important to look at is there was $0.67 in net spread and dollar roll income per common share. Recall the company paid $0.65 in dividends, so all cash signs point to this being covered adequately although there are some key exclusions to the $0.67 figure, such as a $0.09 loss on net servicing income. Overall, it was quite strong. What about the key metrics we need to be most aware of for an mREIT? These are the book value, the constant prepayment rate and the net interest rate spread. First, book value dipped slightly to $21.91 per common share, down 1.5% from the $22.24 at the end of Q3 2014. The constant prepayment rate was a very reasonable 8.0% in the quarter, but what's more is that based on current holdings and expectations, the portfolio agency holdings have just an 8.2% lifetime constant prepayment rate. Finally, the net interest rate spread dipped slightly. MTGE's average asset yield on its MBS portfolio for the fourth quarter was 3.18%, compared to 3.28% for the third quarter. MTGE's average cost of funds was 1.02%. Excluding dollar rolls, the net interest rate spread was 2.16%, down 10 basis points from the 2.26% in Q3 2014. While this narrowing is disappointing, it is not unexpected given the moves in rates in…