Is ARMOUR Residential REIT, Inc. (ARR) A Good Stock To Buy?

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Pine River Capital Management, led by Brian Taylor, initiated the largest position in ARMOUR Residential REIT, Inc. (NYSE:ARR). Pine River Capital Management had $0.9 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.8 million position during the quarter. The other funds with brand new ARR positions are Ken Griffin’s Citadel Investment Group and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s also examine hedge fund activity in other stocks similar to ARMOUR Residential REIT, Inc. (NYSE:ARR). We will take a look at Dominion Diamond Corp (NYSE:DDC), Babcock & Wilcox Enterprises Inc (NYSE:BW), Five9 Inc (NASDAQ:FIVN), and Flotek Industries Inc (NYSE:FTK). This group of stocks’ market valuations are closest to ARR’s market valuation.

As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $139 million. That figure was $22 million in ARR’s case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Dominion Diamond Corp (NYSE:DDC) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks ARMOUR Residential REIT, Inc. (NYSE:ARR) is even less popular than DDC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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Disclosure: None