ARMOUR Residential REIT Inc. (ARR) Shares: Are They Risky Or Cheap?

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RTX Stock
RTX Stock

ARMOUR Residential REIT Inc. (NYSE:ARR) finished Wednesday with a subtraction of -$0.05 to close at $6.42, a downside of -0.77 percent. An average of 3,307,700 shares of common stock have been traded in the last five days. There was a fall of -$0.42 in the past week, and it reached a new high 5 times over the past 12 months. The last 20 days have seen an average of 2,927,010 shares traded, while the 50-day average volume stands at 3,002,748.

ARR stock has decreased by -9.07% in the last month. The company shares reached their 1-month lowest point of $6.41 on 09/21/22. With the stock rallying to its 52-week high on 01/04/22, shares of the company touched a low of $5.57 and a high of $11.18 in 52 weeks. It has reached a new high 2 times so far this year and lost -34.56% or -$3.39 in price. In spite of this, the price is down -42.58% from the 52-week high.


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Insider Transactions

356 days have passed since ARMOUR Residential REIT Inc. (ARR) last reported insider trading activity. MOUNTAIN JAMES R, who is Chief Financial Officer, most recently acquired $33,700 shares at $10.81 per share on Oct 01. In this transaction, the insider spent $364,179. Co-CEO and President, Zimmer Jeffrey J, disposed of 28,763 shares at a price of $10.80 on Sep 30. The insider now owns more than $310,750 worth of shares. Prior to that, Co-CEO ULM SCOTT went on to Sale 27,478 shares at $10.80 each on Sep 30. An amount of $296,867 was transacted.

Valuation Metrics

ARMOUR Residential REIT Inc. (ARR) stock’s beta is 1.01. Other valuation ratios to consider include the price-to-book (PB) ratio at 0.70.

Financial Health

Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 6.88 for the quarter ending June 29. Its gross profit as reported stood at $39.62 million compared to revenue of $80.79 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, ARMOUR Residential REIT Inc.’s return on assets was -1.80%.

Earnings Surprise

The analyst consensus anticipated ARMOUR Residential REIT Inc.’s latest quarter earnings to come in at $0.26 per share, but it turned out to be $0.29, a 11.50% surprise. For the quarter, EBITDA amounted to $42.33 million. At the end of the quarter ending June 29, ARMOUR Residential REIT Inc.’s stock balance sheet showed total debt was $6.7 billion. Shareholders own equity worth $114.64 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at ARMOUR Residential REIT Inc. (ARR) price momentum. RSI 9-day as of the close on 21 September was 18.38%, suggesting the stock is oversold, with historical volatility in this time frame at 16.26%.

As of today, ARR’s price is $6.52 -6.14% or -$0.42 from its 5-day moving average. ARR is currently trading -11.57% lower than its 20-day SMA and -14.29% lower than its 100-day SMA. However, the stock’s current price level is -8.68% below the SMA50 and -34.49% below the SMA200.

The stochastic %K and %D were 7.42% and 10.63%, respectively, and the average true range (ATR) was 0.18. With the 14-day stochastic at 1.68% and the average true range at 0.18, the RSI (14) stands at 26.39%. The stock has reached -0.25 on the 9-day MACD Oscillator while the 14-day reading was at -0.38.

Analyst Ratings

B. Riley Securities reiterated its a Neutral rating on ARMOUR Residential REIT Inc. (NYSE: ARR), but raised their price target to $11, indicating a potential price increase of 41.64% for the stock. The consensus rating for ARMOUR Residential REIT Inc. (ARR) among analysts is Hold. According to current brokerage recommendations, 1 brokerage firm advise that investors sell ARR, while 4 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 0 others rate it as a “buy”.

What is ARR’s price target for the next 12 months?

Analysts predict a range of price targets between $6.00 and $8.50, with a median target of $7.00. Taking a look at these predictions, the average price target given by analysts for ARMOUR Residential REIT Inc. (ARR) stock is $7.17.

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