ARMOUR Residential REIT, Inc. (ARR): One mREIT to Put on Your Buy List This Week

Page 1 of 2

ARMOUR Residential REIT, Inc. (NYSE:ARR) recently announced its preliminary estimated results for the fourth quarter and the year 2012 as well as a new preferred stock offering. In this article, I will discuss Armour Residential as an investment in relation to the estimated fourth quarter results and latest stock offering.

ARMOUR Residential REIT, Inc. (NYSE:ARR) announced the preliminary estimated results and select financial data for the fourth quarter. The company estimates that it will earn taxable refit income per share for the quarter and for the year ended Dec. 31, 2012, which would be sufficient to cover the dividends paid of $0.27 and $1.20 per share for the quarter and for the year respectively. GAAP earnings for the fourth quarter are expected to be in the range of $114-$117 million, working out to an EPS in the range of $0.36 to $0.38 per diluted common share.

ARMOUR Residential REIT, Inc. (NYSE:ARR)ARMOUR Residential REIT, Inc. (NYSE:ARR)’s book value as of Dec. 31, 2012 works out to $7.28 to $7.30 per diluted common share. As of this date, there were 309,013,984 common shares and 2,005,611 series A preferred shares outstanding. As at Feb. 12, there were 309,045,797 common shares, 2,180,572 series A preferred shares and 5,400,000 series B preferred shares outstanding.

Armour estimates that its current book value shareholders’ equity is between $6.70 and $6.76 per diluted common share. The preliminary estimated GAAP earnings and book value, as well as taxable REIT income, are subject to revision on the finalizing of the accounts. These preliminary estimates could differ because of factors such as additional adjustments in the calculation of financial results, or portfolio values and accounting changes required by GAAP.

ARMOUR Residential REIT, Inc. (NYSE:ARR) also announced that it has priced an underwritten public offering of 65,000,000 shares of common stock. The underwriters have been granted a 30-day option to purchase up to 9,750,000 additional shares of common stock and are offering the shares at prevailing market prices or from time to time through the NYSE, the over-the-counter market, negotiated transactions or otherwise. The company intends to use the net proceeds of the offering for the acquisition of additional agency securities depending on market conditions, as well as for general corporate purposes. The offer is priced at $6.84 a share against the current market price of around $6.55 a share.

Deutsche Bank has downgraded Armour Residential from buy to hold with a price target of $6.75 (down from $8.30). The bank has commented as follows: “On February 13, ARR reported an estimated current bvps range of $6.70 and $6.76, down 13% from the last reported bvps of $7.77 as at 30 September. Given the book value range and yesterday’s equity offering, we estimate pro forma post-deal book value of $6.73 per share. As a result of the bvps decline and a reduction in our bv premium from 5% to 0%, we are reducing our target to $6.75 per share from $8.30 per share. Given our new target relative to the current valuation, we are reducing our rating to hold.”

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!