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
blog comments powered by Disqus
Insider Monkey Headlines
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

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

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!