ARMOUR Residential REIT, Inc. (ARR) recently made a public offering of 16 million shares worth approximately $114 million at an average price of $7.40 after deduction of underwriting commissions and expenses. In a bid to cover over allotments, the underwriters exercised the option and purchased 2.4 million shares in connection with the underwritten public offering.
After the underwriting option was exercised, ARMOUR Residential sold 18.4 million shares generating net proceeds of approximately $131.2 million.
ARMOUR Residential intends to utilize the proceeds generated from the offering to acquire additional assets as per its investment objectives and strategies. This public offering will enable the company to attain financial flexibility and seize investment opportunities and acquisitions, which will go a long way in enhancing top-line growth. As of March 31, 2011 ARMOUR Residential’s cash position stood at $47.1 million.
During the first quarter 2011, ARMOUR Residential reported a net income of $8.6 million or 33 cents per share as compared to $0.3 million or 13 cents per share in the prior-year quarter.
ARMOUR Residential is a Maryland corporation focused on investing in Agency residential mortgage-backed securities. The company’s residential mortgage backed securities (RMBS) portfolio consists of hybrid adjustable-rate, adjustable-rate and fixed-rate residential mortgage-backed securities issued or guaranteed by U.S. Government-chartered entities.
ARMOUR Residential currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, MFA Financial, Inc (MFA) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
ARMOUR RES REIT (ARR): Free Stock Analysis Report
MFA FINANCIAL (MFA): Free Stock Analysis Report
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