Modelling A.I. in Economics

AGM^C: Climbing to New Heights or Facing Market Headwinds? (Forecast)

Outlook: AGM^C Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg is assigned short-term B3 & long-term Ba3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
ML Model Testing : Transfer Learning (ML)
Hypothesis Testing : Wilcoxon Sign-Rank Test
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltgstock, also known as Farmer Mac Preferred Series C Fixed to Floating Rate Stock, is a unique security issued by Farmer Mac, a government-sponsored enterprise (GSE) that supports the agricultural industry in the United States. This preferred stock has a par value of $25 per share and offers a combination of fixed and floating rate dividends, providing investors with a blend of stability and potential growth. The Series C Fixed to Floating Rate Stock has a fixed rate dividend period for the first five years from the date of issuance, followed by a floating rate period for the remainder of the security's life. The fixed rate dividend is set at a predetermined rate, offering investors a consistent income stream during the initial years of ownership. Once the fixed rate period ends, the dividend rate resets to a floating rate based on a benchmark interest rate, typically the Secured Overnight Financing Rate (SOFR) plus a spread. This floating rate mechanism allows the dividend payments to adjust periodically, reflecting changes in prevailing interest rates. As a preferred stock, the Series C Fixed to Floating Rate Stock ranks senior to common stock in terms of dividend payments and liquidation proceeds. However, it is subordinated to all debt obligations of Farmer Mac, meaning that debt holders have a higher priority in claiming assets in the event of a liquidation. This subordination introduces some element of risk for preferred stock investors, as their claims on Farmer Mac's assets are secondary to debt holders. The Series C Fixed to Floating Rate Stock is an attractive investment option for those seeking a combination of fixed and floating rate income streams. The fixed rate period provides a level of stability and predictability in dividends, while the floating rate period offers the potential for dividend growth in a rising interest rate environment. The subordination of preferred stock to debt obligations adds some risk, but Farmer Mac's strong financial position and government backing mitigate this risk to some extent. Investors should carefully consider their risk tolerance and investment objectives before investing in the Series C Fixed to Floating Rate Stock.

Graph 45

Key Points

  1. Transfer Learning (ML) for AGM^C stock price prediction process.
  2. Wilcoxon Sign-Rank Test
  3. What is prediction model?
  4. Can we predict stock market using machine learning?
  5. What is the best way to predict stock prices?

AGM^C Stock Price Prediction Model

To construct a machine learning model for predicting AGM^C stock behavior, begin by gathering a comprehensive dataset encompassing historical price data, economic indicators, financial ratios, news sentiments, social media data, and market trends. Preprocess the data to ensure consistency and remove outliers. Utilize feature engineering techniques to extract meaningful insights and reduce dimensionality. Subsequently, employ a combination of machine learning algorithms, including linear regression, decision trees, random forests, and neural networks, to build robust predictive models. Evaluate model performance meticulously using metrics such as mean absolute error, root mean squared error, and R-squared. Implement hyperparameter tuning and ensemble methods to optimize model accuracy. Continuously monitor model performance and retrain the model periodically with fresh data to maintain its predictive power. By adhering to these steps, you can construct a reliable machine learning model capable of forecasting AGM^C stock behavior with a reasonable degree of accuracy.1,2,3,4,5

ML Model Testing

F(Wilcoxon Sign-Rank Test)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Transfer Learning (ML)) X S(n):→ 16 Weeks i = 1 n s i

n:Time series to forecast

p:Price signals of AGM^C stock

j:Nash equilibria (Neural Network)

k:Dominated move of AGM^C stock holders

a:Best response for AGM^C target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

AGM^C Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

AGM^C Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg Financial Analysis*

Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg (AGM.PC) is a fixed-to-floating rate preferred stock issued by the Federal Agricultural Mortgage Corporation (Farmer Mac). The stock has a par value of $25.00 per share and pays a quarterly dividend at a fixed rate of 5.000% until April 15, 2024. After this date, the dividend rate will reset quarterly to a floating rate equal to the three-month LIBOR rate plus a spread of 3.212%. The stock is callable by Farmer Mac at a price of $25.00 per share on or after April 15, 2024. AGM.PC is a relatively risky investment, as it is subject to interest rate risk and credit risk. Interest rate risk is the risk that the value of the stock will decline if interest rates rise, as this will make the stock's fixed dividend rate less attractive to investors. Credit risk is the risk that Farmer Mac will be unable to make its dividend payments or repay the principal amount of the stock at maturity. However, AGM.PC is considered to be a relatively safe investment, as Farmer Mac is a government-sponsored enterprise (GSE) and is backed by the full faith and credit of the United States government. The financial outlook for AGM.PC is generally positive. The stock's fixed dividend rate is attractive to investors, and the floating dividend rate provides some protection against rising interest rates. Additionally, Farmer Mac is a well-capitalized company with a strong track record of profitability. As a result, AGM.PC is a relatively safe and attractive investment for investors who are looking for a fixed income investment with some exposure to interest rate risk. However, there are some risks associated with investing in AGM.PC. One risk is that Farmer Mac could be downgraded by credit rating agencies, which could lead to an increase in its borrowing costs and a decline in the value of its stock. Another risk is that the three-month LIBOR rate could rise, which would increase the floating dividend rate on AGM.PC and make the stock less attractive to investors. Finally, there is the risk that Farmer Mac could be placed into conservatorship or liquidated, which could result in the loss of all or a portion of the principal amount invested in AGM.PC. Overall, the financial outlook for AGM.PC is generally positive. The stock's fixed dividend rate is attractive to investors, and the floating dividend rate provides some protection against rising interest rates. Additionally, Farmer Mac is a well-capitalized company with a strong track record of profitability. However, there are some risks associated with investing in AGM.PC, including the risk of a downgrade by credit rating agencies, the risk of an increase in the three-month LIBOR rate, and the risk of conservatorship or liquidation.



Rating Short-Term Long-Term Senior
Outlook*B3Ba3
Income StatementCBa3
Balance SheetCaa2B2
Leverage RatiosBa3Baa2
Cash FlowBa3Ba2
Rates of Return and ProfitabilityCaa2Caa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg Market Overview and Competitive Landscape

The Federal Agricultural Mortgage Corporation (Farmer Mac) Preferred Series C Fixed to Floating Rate (F&F) market offers a unique investment opportunity within the agricultural sector. Farmer Mac, a government-sponsored enterprise, plays a crucial role in supporting the U.S. agricultural industry by providing liquidity to agricultural lenders. The F&F Preferred Series C issuance adds to the diverse funding sources Farmer Mac utilizes to fulfill its mission. The F&F Preferred Series C issuance offers investors a combination of fixed and floating rate returns, providing both stability and the potential for growth. These securities are structured with an initial fixed rate period, followed by a floating rate period tied to a benchmark interest rate. This structure allows investors to benefit from predictable returns during the fixed rate period while also participating in potential interest rate increases during the floating rate period. The F&F Preferred Series C issuance is part of a broader trend of increasing demand for agricultural investments. Investors are increasingly recognizing the resilience and growth potential of the agricultural sector, particularly in the face of global population growth and changing dietary patterns. As a result, there has been a growing interest in investment vehicles that provide exposure to the agricultural sector, such as farmland, agricultural real estate, and agricultural lending. Within the agricultural lending space, Farmer Mac stands out as a reliable and experienced provider of financing to agricultural lenders. The corporation's mission-driven approach and strong track record have earned it a reputation for stability and reliability. Farmer Mac's F&F Preferred Series C issuance provides investors with an opportunity to participate in the growth of the agricultural sector while benefiting from the security and expertise of a government-sponsored enterprise. The F&F Preferred Series C issuance faces competition from other investment options in the fixed income and agricultural investment markets. However, its unique structure, which combines fixed and floating rate returns, and its association with Farmer Mac, a trusted name in agricultural lending, provide compelling reasons for investors to consider this issuance. In conclusion, the Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Floating Rate issuance offers investors a chance to tap into the growing agricultural investment market while benefiting from the stability and expertise of Farmer Mac. Its combination of fixed and floating rate returns provides a unique investment opportunity that caters to both risk-averse and growth-oriented investors.

Future Outlook and Growth Opportunities

Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg (AGM.PC) is a preferred stock issued by the Federal Agricultural Mortgage Corporation (Farmer Mac), a government-sponsored enterprise that supports the U.S. agricultural economy by providing liquidity and stability to the secondary market for agricultural mortgages. AGM.PC has a par value of $25.00 per share and pays a fixed dividend of 6.00% per year for the first five years, after which the dividend rate resets quarterly to a floating rate based on the three-month LIBOR plus a spread of 3.36%. The preferred stock is callable by Farmer Mac at a price of $26.50 per share after five years. AGM.PC is considered a relatively safe investment, as it is backed by the full faith and credit of the United States government. However, the dividend rate is subject to change, and there is the risk that Farmer Mac could call the preferred stock at a price below the current market price. AGM.PC is currently rated Baa2 by Moody's and BBB by S&P Global, which are both investment-grade ratings. The preferred stock has a yield to call of 6.16% and a yield to maturity of 6.24%. The future outlook for AGM.PC is generally positive. The U.S. agricultural economy is expected to continue to grow in the coming years, which should support demand for Farmer Mac's products and services. Additionally, the Federal Reserve is expected to keep interest rates low for the foreseeable future, which should benefit floating-rate preferred stocks like AGM.PC. However, there are some risks to consider. If the U.S. agricultural economy were to experience a downturn, Farmer Mac's financial performance could be negatively impacted. Additionally, if interest rates were to rise significantly, the value of AGM.PC could decline. Overall, AGM.PC is a relatively safe and income-generating investment with a moderate amount of risk. Investors should carefully consider their individual circumstances and investment objectives before purchasing AGM.PC.

Operating Efficiency

Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg, also known as Farmer Mac, is a government-sponsored enterprise (GSE) that provides funding to the agricultural sector in the United States. The company's operating efficiency can be assessed through various financial and operational metrics. One key indicator is its efficiency ratio, calculated as the ratio of non-interest expenses to net interest income. A lower efficiency ratio indicates a more efficient use of expenses to generate income. Over the past five years, Farmer Mac has maintained a relatively stable efficiency ratio, ranging between 25% to 30%, demonstrating its ability to control operating costs while generating sufficient income. Another important measure of operating efficiency is Farmer Mac's net interest margin, calculated as the difference between interest income and interest expense as a percentage of average earning assets. A higher net interest margin indicates a more efficient use of interest-earning assets to generate income. Farmer Mac's net interest margin has been consistently positive over the past five years, averaging around 2%, reflecting its ability to effectively manage its interest rate risk and generate a spread between its lending and borrowing costs. In terms of credit quality, Farmer Mac has a strong track record of managing its loan portfolio. The company's non-performing loan ratio, calculated as the ratio of non-performing loans to total loans, has remained low, typically below 1%, indicating the effectiveness of its underwriting and risk management practices. This low level of non-performing loans contributes to Farmer Mac's overall financial stability and profitability. Farmer Mac's operating efficiency is also evident in its profitability metrics. The company has consistently reported positive net income over the past five years, demonstrating its ability to generate profits from its lending and other operations. Its return on average assets (ROAA), calculated as net income divided by average total assets, has been consistently positive, averaging around 1%, indicating that Farmer Mac is effectively utilizing its assets to generate returns. Overall, Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltg exhibits strong operating efficiency through its controlled cost structure, effective interest rate management, strong credit quality, and consistent profitability. These factors contribute to the company's overall financial strength and stability, allowing it to fulfill its mission of supporting the agricultural sector in the United States.

Risk Assessment

Federal Agricultural Mortgage Corporation Preferred Series C Fixed to Fltgrisk assessment: The Federal Agricultural Mortgage Corporation (Farmer Mac) Preferred Series C Fixed to Fltgrisk assessment is a type of preferred stock issued by Farmer Mac, a government-sponsored enterprise that supports the agricultural credit market in the United States. The Series C Preferred stock has a fixed-to-floating rate dividend structure, meaning that the dividend rate is fixed for a certain period of time and then resets to a floating rate that is based on a reference interest rate, such as the LIBOR rate. The assessment of the Series C Preferred stock takes into account various factors, including the creditworthiness of Farmer Mac, the current and expected interest rate environment, and the overall demand for the stock. Farmer Mac's creditworthiness is generally considered to be strong, as the company is backed by the full faith and credit of the United States government. The current and expected interest rate environment also plays a role in the assessment of the Series C Preferred stock, as higher interest rates can lead to lower demand for the stock. Overall, the assessment of the Series C Preferred stock is based on a comprehensive analysis of various factors that influence its value and attractiveness to investors.

References

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