Stocks of ARMOUR Residential REIT Inc. (ARR) are poised to climb above their peers

ARMOUR Residential REIT Inc. (NYSE: ARR) stock fell -2.18% on Friday to $6.28 against a previous-day closing price of $6.42. With 4.13 million shares changed hands, the volume of the stock remained heavier than its average volume of 2.93 million shares. During the session, the REIT – Mortgage company that operates in wider Real Estate sector, reached to the highest price of $6.42 whereas the lowest price it dropped to was $6.20. The 52-week range on ARR shows that it touched its highest point at $11.18 and its lowest point at $5.57 during that stretch. It currently has a 1-year price target of $7.17. With its current market cap of 725.40 million, ARR has annualized dividend of $1.20 while the current yield stands at 19.11%. Beta for the stock currently stands at 1.01.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ARR was down-trending over the past week, with a drop of -4.85%, but this was down by -13.50% over a month. Three-month performance dropped to -3.38% while six-month performance fell -24.34%. The stock lost -42.44% in the past year, while it has lost -35.98% so far this year. A look at the trailing 12-month EPS for ARR yields -1.19 with Next year EPS estimates of 1.12. For the next quarter, that number is 0.29. This implies an EPS growth rate of 101.40% for this year and -0.80% for next year. EPS is expected to decline by -11.36% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 15.20%.

Float and Shares Shorts:

At present, 114.63 million ARR shares are outstanding with a float of 113.35 million shares on hand for trading. On Jul 14, 2022, short shares totaled 13.46 million, which was 12.17% higher than short shares on Jun 14, 2022. In addition to Mr. Jeffrey J. Zimmer as the firm’s Co-CEO, Co-Vice Chairman & Pres, Mr. Scott Jeffrey Ulm serves as its Co-CEO, Co-Vice Chairman & Head of Risk Management.

Institutional Ownership:

Through their ownership of 47.37% of ARR’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 39.11% of ARR, in contrast to 13.36% held by mutual funds. Shares owned by individuals account for 1.29%. As the largest shareholder in ARR with 15.04% of the stake, BlackRock Fund Advisors holds 17,237,720 shares worth 17,237,720. A second-largest stockholder of ARR, The Vanguard Group, Inc., holds 11,537,792 shares, controlling over 10.07% of the firm’s shares. Global X Management Co. LLC is the third largest shareholder in ARR, holding 4,301,117 shares or 3.75% stake. With a 6.67% stake in ARR, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 7,648,570 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.69% of ARR stock, is the second-largest Mutual Fund holder. It holds 3,085,068 shares valued at 21.9 million. Invesco KBW High Dividend Yield F holds 2.52% of the stake in ARR, owning 2,884,405 shares worth 20.48 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ARR since 5 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ARR analysts setting a high price target of $8.50 and a low target of $6.00, the average target price over the next 12 months is $7.17. Based on these targets, ARR could surge 35.35% to reach the target high and fall by -4.46% to reach the target low. Reaching the average price target will result in a growth of 14.17% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ARR will report FY 2022 earnings on 02/15/2023. Analysts have provided yearly estimates in a range of $1.19 being high and $1.04 being low. For ARR, this leads to a yearly average estimate of $1.12. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. ARMOUR Residential REIT Inc. surprised analysts by $0.03 when it reported $0.29 EPS against a consensus estimate of $0.26. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $0.31 and the low estimate is $0.25. The average estimate for the next quarter is thus $0.28.

Summary of Insider Activity:

Insiders traded ARR stock several times over the past three months with 17 Buys and 8 Sells. In these transactions, 68,286 shares were bought while 19,947 shares were sold. The number of buy transactions has increased to 64 while that of sell transactions has risen to 32 over the past year. The total number of shares bought during that period was 260,646 while 131,189 shares were sold.

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