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ARMOUR Residential (ARR) takes advantage of a recent move higher in its stock price, launching a...

ARMOUR Residential (ARR) takes advantage of a recent move higher in its stock price, launching a secondary offering of 40M shares, with an option for underwriters to purchase another 6M. The company should raise about $300M with which to buy more MBS. Shares -2.3% AH. (PR)
Comments (6)
  • Is this mortgage REIT another scam? Why do they keep
    launching new and preferred shares of stock? They then lower
    their dividend. It just doesn't add up.

     

    Phil
    10 Jul 2012, 02:22 AM Reply Like
  • According to this article, dividends should remain the same but the better entry point into REIT is created.
    http://seekingalpha.co...

     

    It is cheaper by 2.42% thanks to second offering, will be buying those today.
    10 Jul 2012, 04:16 AM Reply Like
  • I AM VERY HIGH ON ARR AND AGNC EQUALLY. I INVEST IN BOTH CONSTANTLY....NOT LONG, BUT IN AND OUT.

     

    MY FRUSTRATION COMES WITH TRYING TO TIME THE SECONDARY OFFERINGS. I SELDOM GET IT RIGHT.

     

    I PREFER THE GAIN TO THE DIVIDEND, FOR TAX PURPOSES.
    10 Jul 2012, 02:56 AM Reply Like
  • Is this mortgage REIT another scam?

     

    Would seem there is a misunderstanding here.
    Given that ARR receives an influx of cash by offering more trust units, and that cash allows ARR to leverage/borrow about seven times that amount, then ARR grows their assets by $2.1 billion by investing it all. In the process, ARR will now own $2.1 billion more in mortgages, upon which home owners are paying interest, which is more income for ARR.

     

    Consequently, the price and distribution of a unit of ARR remains approximately the same as it was before the secondary offering. No scam. No loss to unit holders of the trust. No reduction in distributions.

     

    Yet, because many people like yourself do not understand the process, the price invariably drops at the offering, making a better purchase price at a higher yield. Looking at charts for years into the past in all REITS, one instantly realizes the price recovers quickly after the offering. The short lived fluctuation in price is merely a wonderful buying opportunity.
    10 Jul 2012, 01:56 PM Reply Like
  • Frank
    that was basically REITS for dummies( I am a college educated man but I have limited knowledge in this environment) and I just learned something new.. something that I actually copied and pasted for my own good.. for future purposes. thank you.. being a normal guy who does a little dabbling here and ther with good DD on my part, I still dont understand many of what some authors spill on these pages. This was comprehensive to me. Maybe there is more to it, but for now, I will go with this knowledge
    10 Jul 2012, 05:58 PM Reply Like
  • considering the risk-reward, I find this REIT to be well worth holding,as long as Uncle Ben keeps rates at near zero...makes ARR a solid place to be for a 24-30 month hold.with my entry price at just over 7 the yield exceeds 17%..and after todays correction and huge volume, I am a happy camper
    10 Jul 2012, 11:00 PM Reply Like
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