Arbor Realty: Don't Bail Out Now - Buy The Pullback

Oct. 21, 2022 2:49 PM ETArbor Realty Trust, Inc. (ABR)46 Comments

Summary

  • Arbor Realty has benefited from the Fed's aggressive rate hikes, given its floating rates portfolio. Still, the market sent ABR tumbling, posting a YTD total return of -28.6%.
  • However, we gleaned that ABR's valuation seems attractive now, even though the housing market continues to come under significant pressure.
  • We assess that the market has already de-rated ABR since November 2021, as it anticipated significant headwinds on its ability to sustain its distributable EPS growth.
  • We explain why we think the current levels are attractive for investors to add more to positions.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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Thesis

Investors in mREITs have also suffered the brunt of the bear market over the past year, including in leading multifamily asset class leader Arbor Realty Trust, Inc. (NYSE:ABR).

As a result, ABR posted a YTD return of -28.6%, underperforming the

Arbor Realty Interest income change %

Arbor Realty Interest income change % (Company filings)

Arbor Realty Net interest income change % and Distributable income change % consensus estimates

Arbor Realty Net interest income change % and Distributable income change % consensus estimates (S&P Cap IQ)

ABR NTM Distributable EPS multiples valuation trend

ABR NTM Distributable EPS multiples valuation trend (koyfin)

ABR TTM TBV multiples valuation trend

ABR TTM TBV multiples valuation trend (koyfin)

ABR price chart (weekly)

ABR price chart (weekly) (TradingView)

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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