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ARMOUR Residential (ARR -3%) tumbles after last night's earnings report was accompanied by a...

ARMOUR Residential (ARR -3%) tumbles after last night's earnings report was accompanied by a secondary offering of 55M shares that had to be coming given the shares' premium to book value (8.6% before the offering). It's the 2nd offering in a month and 4th in the last 8 months.
Comments (20)
  • Wow! 38 million volume in the first hour, six times average daily volume in an hour. Yet, ARR was holding steady between 7.48 and 7.51, and now larger buys are starting a rise in price. Great buy opportunity. Drop in price increases yield to 16%. Next two distributions of $0.10 already locked in for ex-dates 8-13 and 9-12.

     

    The 24 million sold at opening seems like a sucker's bet. They will not see it as low as they sold it. Yield hungry dollars are moving in to pick up the "sales special." Just do not get paniced out. I stay fully invested in a rising market, so didn't have cash beyond my last two distributions from ARR, but I reaped a few extra shares with those.

     

    Nothing like rocking the boat. Guess the management at ARR must have heard those of you who wanted to get in at a lower price.
    3 Aug 2012, 11:04 AM Reply Like
  • Frank...
    I just posted up last evening, I was patiently waiting a pullback. I got it!.. I got in 2.75% less expensive. Sold some CYS higher and am watching it pull back a little. Monday is another day.. Two is starting to look like a bargain, I read their call, they seemed positive, I like what they are doing with thier diversification strategy. Sure defaults are going to be out there.. Working with Wells for another year, I'll take it. As all these REITs are risk adverse, I remain where eagles soar.
    Happy marketing Frank Ellis!
    3 Aug 2012, 12:55 PM Reply Like
  • I added to my position today.
    3 Aug 2012, 01:18 PM Reply Like
  • Great buying opportunity. Just couldn't resist picking up more shares.
    3 Aug 2012, 01:54 PM Reply Like
  • nah, too high.
    4 Aug 2012, 01:13 AM Reply Like
  • Selling more shares, are they in trouble?
    4 Aug 2012, 03:44 AM Reply Like
  • No, they are growing, this how reits grow. However whats concerning to me is 3 spo in 3 months and issuing preferred shares all in the same time frame. Just seems excessive to me. Moving too fast and their leverage is at 9x which is a lot more than AGNC or NLY right now.

     

    Worried about a flame out considering this management was involved with Bimini.
    4 Aug 2012, 03:50 AM Reply Like
  • Out at $7.81 and back in at $7.46. enjoy the ride while you can....
    4 Aug 2012, 12:38 PM Reply Like
  • Right behind you Kieth at $7.48.. Yes they are leveraged a little higher. it does add more risk.. I am sure management is aware of a flame out, along with many other obstacles which could lead to disaster. With this extra cash they have garnished, I am of the belief they are adjusting/preparing for the possibilities of future adversity..maybe QE.

     

    I am still of the belief the FED is contemplating yanking this rug out from under REITs. As has been stated in many venues.. if it seems too good to be true, it ususually is. Chance favors the prepared mind. DD is an imperative element to survive the space.
    4 Aug 2012, 02:04 PM Reply Like
  • pessimistic optimist , Are you talking about the implied guarantee on fannie mae freddie mac etc securities ? or the statements about keeping interest rates lo for the next 2 3 years
    5 Aug 2012, 03:10 PM Reply Like
  • No.. not implied guarantee. The FED statements. And I want to re-state, these were not promises. Information just came out last week and re-iterated they will keep rates where they are for the foreseeable future through the end of 2014.. No change was the word.. followed with through the end of 14. You know that.. so this is yesterday's news.

     

    I listened to it on DVR a few times.. reading into it which I know.. I shouldn't have got so deep. I took it as though it could extend into 2015.. what I stated as read above, is the FED can do whatever they would like and between the popularity of these high yielders and the pressures combined with FED metrics, who knows how they are going to react. maybe they start purchasing paper? One REIT stated that there is plenty to go around so, FED, go for it. They are prepared for it. I think it was TWO.. don't quote me. I have read a bunch of qtrlys lately.

     

    I am keeping my powder dry. I am watching interest rates on a daily basis. I will continue DD. In the unforeseen-to us investors- event the interest rateschange direction I don't want to get caught with my pants down. I am positioned to limited stop out as a precaution.

     

    All this means is if this all goes to hell in a hand basket ( we all know a good thing like this cannot last forever) and FED reverses order, it would be best to have a game plan in place.. even as has been said, its sometimes best to do nothing. ..having something in this risk adverse space is key to survival.

     

    Frankel.. 3 years I didn't hear... just through 14. If it gets as far as the end of 14, we all did well.. I feel some of the companies are well positioned into the early rise of rates. We shall see just how well.
    6 Aug 2012, 04:37 AM Reply Like
  • IMHO the FED has a very vested interest in keeping rates low forever. Not only to spur the economy, but in order to service the monstrous DEBT. I recently read that fifteen cents of every tax revenue dollar goes to service the DEBT. Can you imagine what it will be if interest rates "nomalize"?!
    8 Aug 2012, 05:56 AM Reply Like
  • i just got out of agnc yesterday and got into arr this morning . you just do not know . agnc released prelim #s a week ago and the stock did not budge . today the numbers were offical and the stock lost 5 points
    8 Aug 2012, 11:22 AM Reply Like
  • Frankel
    I was out of my major position AGNC after that fanatical crash. Since I bought well below 30.. I couldn't completely leave..I am up through all this and beside that, I still have $$ to make.

     

    All this talk of flash crash.. how, where, who and why? To me, it is the patron in the theatre smelling burnt popcorn yelling fire, and what happens, folks running for the exits. Lemmings of a sort. Not alot of patience exhibited and it cost a bunch of folks.. basically all of us. Now is the time to evaluate, make a plan and then execute it. What happened was folks bought higher and after the crash as panic set in, sold much lower. Rhetorically, not what investors are characteristically supposed to do. This crash and the following actions would deflate any new investor going forward.

     

    All of this resulted in a fairly sizable drop in share price for the REIT.. actually some others in the space as well. After this huge drop, I bought more. I followed D. Gartman on this move.. when panic and sell offs take place, start shopping because there are deals to be had. I was fortunate to have some cash ( DRIP) on the sideline.

     

    This REIT is not going to stay down. As the snowball gained size and momentum and stopped many out, it will snow again. Folks realize this is a well run, well managed company. I am of the belief there will be an upward tick in the 3 to 4% .. then if it breaks resistance, it will go higher. Sure, the dividend will take a hit, they will sacrifice a piece to preserve share growth. Another sign of a winner. The snow will be lighter, fluffier.. easier to negotiate as the water was skimmed. Yes, it is metaphoric but sometimes that is how my mind thinks. Some of my best Professors used them, and it helped me becume a coledge grajuate. :)....gotta lighten this stuff up, the world isn't coming to an end!!!

     

    What I want to mention is through all of this, ARR didn't take that big hit. They went down a little comparably, but they remain rangebound. Even with that 3% over the last 7 trading days, I bought in also at 3% less. Yes, its only .21 but pennies still add up to a % and that to me is what we are trying to accomplish.

     

    Finishing, the better of these companies will survive the trends, the metrics of gov't and beat up housing markets. As these REITs move up.. I will start trail stops on a piece of each REIT. They will be tighter, and I will buy them back cheaper and of course DRIP in. Rinse and repeat

     

    Folks, stay patient and keep some powder dry.
    9 Aug 2012, 02:18 PM Reply Like
  • Did poeple really think this stock could hold up at a huge premium to book?

     

    REITs are high risk and fortunes can change a lot during the quarter. AGNC is the best out there YTD, but keep in mind they are highly leveraged (reits in general), and just a tweak in the wrong direction with their structure or yield curve and prove disastrous.

     

    Enjoy the income while it lasts.
    9 Aug 2012, 07:24 PM Reply Like
  • IMadav
    I am of the belief the sky is not going to fall. Your warning.. if that is what your reply is,. is appreciated however it sounds as though your sidelined now? Just a thought.

     

    I play the risk, as we all do. I do my homework.. I practice DD, burn lots of midnight oil. That is pretty much all I can do, unless I sideline my cash. I will not lose a dime in vain, if I can help it. Sure if a tweak happens, things are most likely not going to be favorable for the holders of shares in this space. I will say I like my odds with ARR as as I mentioned they tend to not take such a hit.

     

    This REIT follows the same metrics of my annuity...or so it would seem. . I am not all in , there either. My folio reacts somewhat less to changes in overall market shifts. I don't get to reap all the rewards, but I don't feel the full brunt of a sell off.

     

    There is not one REIT in the space that we talk about or own that does not involve risk. Sure the preferred will be a little less risky, but I speak of non preferred REITs. .

     

    We have seen the flash crash and its destruction. In its wake was left an opportunity not for the feign of heart. I took advantage, and I will enjoy the income while it lasts. I enjoy following your comments as they provide me with another tool for my belt. some who write for SA I also enjoy. I look forward to reading posts that make me think.. act.. find, seek and then re assess my current positions. Thanks for helping me.

     

    I don't worry as much about the qtr with ARR , I will not insult your intelligence to tell you why. I do worry a bit about what the other players in the space do and don't do. Being diversified in this space isn't quite the same as owning a 3x short stock to hedge the major markets but I recognize that each displays different manners on given days.

     

    Today, the sum of all my stable came in green. I am happy, but I know it could get hinkey in a NY minute. Just the same madav, I currently remain long in the four horsemen. (today)
    ARR, MTGE, TWO, AGNC....my closer!
    10 Aug 2012, 02:52 AM Reply Like
  • Yes, you understood me. I like AGNC don't get me wrong, but some of the disappointed may have taken unecessary risk thinking it was a home run with a 14% yield.

     

    I am overweight on ARR for now, but I watch it very closely, I made a great entry point and am happy with to look forward to the 30% annual return rate :). I too had AGNC at 29, but I figured it would run up and crash back down took the gain. No worries, it will come back down. I waited for a year for ARR to make a temporary dive in the 6.90s. Be patient, it will come back to book value.
    10 Aug 2012, 06:48 AM Reply Like
  • Good choices. What about a little diversity out of real estate into oil?
    What? No WHZ? Declared 8-8, Qtr distribution of $0.894326, ex-date 8-20, payable 8-29.
    AT Friday close I'm showing yields of:
    WHZ 17.08%
    ARR 16.10%
    NYMT 15.80%
    AI 15.3%
    AMTG 15.2%
    MTGE 15.0%
    AGNC 14.9%
    TWO 14.5%
    CYS 14.3%
    RSO 14.2
    NLY 13.2%
    and a multitude of lesser yields.
    I'm long the top of the list.
    12 Aug 2012, 06:02 PM Reply Like
  • Energy isn't a sector I like to dable in, it too volatile these last few years, the peak and valleys are too painful.
    12 Aug 2012, 10:23 PM Reply Like
  • Madav,
    what do you suppose the inertia in the trading pits would be if more folks were patient? I wonder as the stock had dropped off and folks fled, what would reflect in share price?

     

    as you, I have learned to be patient. I have had to work hard to temper my emotions in the market. I wait, therefore I am more successful than not.

     

    In my folio, my stable, I too am overweight ARR. They go ex-d on Monday, most likely will drop upwards of 2%, then will push forward from there. I am comfortable with the pattern now that I have followed it long enough to appreciate the consistency.

     

    I don't know how many investors try and catch that move as it is fairly tight. I did it last month but as I have mentioned, for me it is not that crucial. It would be more significant to possibly miss the correction after ex-d , so why put myself in that position therefore, I keep my clams in the water.

     

    I have some great entry points myself, and in time, with DRIP available, I'll dollar cost in cheaper again. I have time, and yes, we will reap the harvest on patience.

     

    Carry on madav
    10 Aug 2012, 12:56 PM Reply Like
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