Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
...you're good then...
...very good
...all of a sudden I started to get e-mails on a daily basis from the company – must have been some sort of personnel change that decided to activate certain dormant e-mail "possibilities"...so I check them....and just now decided to see what IHUB might reveal...not much...except of course your post...and you're in good shape... : )
...way late reply...
...to your reply – I just discovered that I had type "...was particularly encouraging" – when I meant "wasn't particularly encouraging".....^%$#@
...well that makes a difference, doesn't it...(I completely negated my own post)
The essence in the article I was referring to was that buying back stock isn't necessarily that good, in that it diverts funds for potentially more constructive purposes, but I don't remember exactly...
I was going to post this link – but I see it was already donea few minutes ago : )
http://seekingalpha.com/article/1077561-armour-residential-another-exciting-mreit-with-low-prepayment-risk?source=email_rt_article_readmore&ifp=0
...I see stock is now at 6.57...when I bought in recently I felt smart buying at 7.00...
...is there a board called "Ten Percent Per Month"...? – I'd like such a board – purpose being to find, each month a stock that within one month will appreciate at least ten percent...and that the board would attract savvy traders I could "learn" from... : )
...we do...?
I haven't made any calculation but it seems to me that I have pretty much neither gained nor lost these last ten, twelve months and like I said, I did benefit from a couple of lucky trades...
..no...I think now we see the outlines of how this company is steered...we all know that racking up a history of steadily lowered dividends is not exactly the hallmark of a confidence inspiring high-yielder...
I read something recently in regards to "stock buy back plans" for high yielding companies and it was particularly encouraging – it wasn't about ARR, but dividend paying companies in general...we'll see how it pans out, but at this point, I would expect, seven cents to be next stop...so if company's buy back activities pushes price up a bit, I will look for an exit...I need price to be a little bit higher...
...then, of course, if the world ends Dec. 21, it's all moot anyway... : )
...yeah, but...
...can you live with 8...? – ...just kidding : )
...and when it turns out dividend WILL be "adjusted" to 8....can we live with 7...and the answer is "yes" – because the "boiling frog" principle works that way...
...anyway...just popping in to say that a year has passed...I have been in ARR for most – all actually – of that time and I made a couple of good moves, due to pure luck an no skill, and yet...I have not gained anything...that severe drop recently...I was entirely unaware, but that was an event I could conceivably have benefitted from, but did not....now shares are at 6.81 (as I type this) and my puny possession is pretty much what it was when I started many months ago...for ME...there is no "winning"...and I had my TD AmeriTrade account set to automatically reinvest – and you know what a gracious thing that is...
...what can I do...? – in principle, it still seems like "trading" is the only way...but then you must know how to BE a "trader"...a calm, cautious, prudent and experienced "trader"...
...I guess this part should not be ignored...
16. Going Concern
The Company has accumulated losses from inception through September 30, 2012 of $10,202,597, has minimal assets, and has negative working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These factors may have potential adverse effects on the Company including the ceasing of operations.
On May 4, 2012, the Company completed the Merger with a publicly-traded company. See note 13 above. The Merger is expected to enable the Company to obtain substantial additional equity capital to finance the Company’s operations through at least 2012, although such funding is not guaranteed. If capital raising efforts are unsuccessful, discontinuance of operations is possible. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
...I still have no exposure – am searching around for something....
...thanks – I'm just watching it...no exposure
...there's a fairly active yahoo board –
...but this steep and fast decline is due to more than just a dump...it's financing related, isn't it...
...what gives...?
...got a pump mail yesterday and checked up on stock to see where it's at – saw it had declined quite a bit and today even more...what's the cause...?
...if claims about technology etc are valid, then it looks pretty cool...
...drops like these tend to indicate that some serious "wrong doing" has taken place...
...9 cents
...according to mail I just got this morning...doesn't seem to deter investors as of right now...
(9 cents for the coming three months)
Article
----------------------
Armour Residential: How It Manages To Pay A 16% Yield And The Risks Of Investing In It
September 8, 2012 | 6 comments | about: ARR
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ARR over the next 72 hours. (More...)
ARMOUR Residential REIT, Inc. (ARR) has a trailing dividend yield of 16.93% and this is expected to be 15.87%, going forward. Even better for investors, the dividend is paid monthly. That is somewhat unique in the Residential REIT industry where most of them pay dividends quarterly. But how can Armour pay such a high dividend and what are some of the risks of investing in it?
Well, how Armour does it is fairly easy to explain. Armour borrows money that requires it to pay a certain interest rate, and buy mortgage-backed securities that pays it interest at rates higher than its cost of borrowing. Simple enough, but it does not end there. Once the mortgage-backed securities are on the balance sheet, Armour can actually use it as collateral to get additional funding, and make additional security purchases, and so on, and so on.
In the case of Armour Residential, it is currently leveraged about 10 times. That means the total liabilities exceeds the total equity on the balance sheet by 10 times.
A back of the envelope calculation looks as follows, based on June 30, 2012 data obtained from the 10-Q:
According to ARR's 10-Q, the weighted average yield of the mortgage backed securities it holds on its balance sheet is 2.97%. The cost of its borrowing, through debt, equity, and repurchase agreements is 0.82%. That leaves a net interest margin of 2.15%. Subtract the additional funding costs for the repurchase agreements of 0.39% and you get a net margin after REPO costs of 1.76%. Leverage that 10 times and you have a 17.6% return. Subtract operating expenses and make any slight adjustments here and there...but you get the idea.
So what are the risks?
The main risks associated with the performance of Armour Residential REIT and subsequently, it's stock price and dividend yield, are as follows:
Prepayment Risk
Since all of the securities purchased by Armour have been at a premium, there is the risk that if prepayments increase or are higher than expected, Armour will only receive the par value of the security, which is 100. The fair value of the securities held on the portfolio as of June 30, was 106.11 on average. This premium is amortized over the expected life of the security. If it gets paid early at 100, Armour not only loses the interest expected from the security, but only receives 100 on a security currently valued at 106+. It would have to write-down the value of those securities to 100 obviously, and the question is then whether that will trigger a margin call. This is where there high amount of leverage can really hurt. That being said, Armour does hold 40% of unlevered equity in cash or cash-like securities in order to deal with margin calls. In addition, Armour runs the risk of not being able to reinvest the proceeds at the same or better rate.
While this may very well be the biggest risk faced by Armour, (as mentioned by management as well), it looks like the prepayment rate trend has been falling...which is positive.
Interest Rate Risk
As interest rates rise, the value of the securities held by Armour will tend to fall. This risk can be mitigated by investing in shorter duration securities and/or hedging exposure to interest rate changes through a combination of swaps, swaptions, and other derivatives, of which Armour uses a combination of. The following table summarizes the risk of a parallel shift in the yield curve to both net interest income and portfolio value.
As you can see in the right-hand column, the portfolio is fairly insulated from interest rate changes due to the hedging employed by the firm. However, the there is a potentially huge risk if interest rates fall by 1%. We don't see that happening at all, so we give this a very low probability of occurring. But interestingly enough, a small rise in rates will actually help net interest income considerably. Only if rates rise by 1% or more does net interest income become negatively affected.
Liquidity Risk
Liquidity risk arises from financing long-maturity Agency securities with shorter-term debt. Since the interest rates on borrowings generally adjust more frequently than interest rates on the adjustable rate securities, there is a risk that borrowing costs will increase faster than interest earnings.
Credit Risk
While mortgage-backed securities typically do have credit risk, Armour only invests in securities guaranteed by the U.S. government or U.S. Government sponsored agencies. Therefore, there is no credit risk in the securities they purchase.
Conclusion
Armour pays a very attractive dividend that yield-starved investors have been seeking. It does come with risks, but as any finance professor will tell you: The higher the potential return, the higher the risk you must take. We think the risks are low enough, at least for the time being, to justify an investment where there is a 16% yield and possible price appreciation. And even if the stock price actually falls, it would have to fall substantially to mitigate the dividend. The monthly distribution isn't bad either.
...I agree, johnsyn is the one...
...who knows this stock...and I may have blown it when I sold recently...did the same with RSO...(that is, my plan to buy back in at a lower level did not pan out, at least not yet...and may never...)
...in the meantime I watched IDOI go ballistic after having been pumped aggressively...you guys probably did as well...judging by all the e-mails I got...
Most of the time one gets pump mails right as a stock is primed to dive, but this one, could have been acted on, but I didn't...
...I found I had already...
...read that article, it's a good one...but doesn't quite touch on every pertinent detail, such as what happens to the value of your entire position when and if a company suddenly announces a lowered dividend...
...I get mails about options trading on a daily basis...but I don't dare...they talk about their "straddles" and their "iron condors" and what have you, but never present a true picture of what is most likely to happen...
(...that I will more rapidly lose my meager funds...)
...yes...
I wouldn't suggest Nancy Pelosi as topping any list, but I get your point...
There are, in my opinion, no solutions for the problems facing the so called US - you have a leadership that lies to the people and a citizenry that lies to itself...there aint no way out of that – the problem is fundamental and the system needs to be eliminated...(yes, eliminated)
...yes, arr has been great, but we are all faced with the reality that dividends HAVE been decreasing – if ever so slowly...and although it's true, like you say, that the "percentage will remain" (after share value decreases as a result of lowered yield), that won't work for you unless...you are out of the stock at that precise moment...that's where I have lucked out – twice – this year...I LUCKED out, I was NOT "skilled"...I wish I could say I was...
..my dream would be to find a stock I could trade on a regular basis, skimming 10-20 percent monthly...what a dream...
...good link...
...great article – did make it all very clear...
...this month action got confused by surprise offering however...
...my personal view is that we are heading towards some sort of massive calamity, which will devastate the stock market..and so continuously observing is of the essence...the US is controlled by gangsters and gangsters will do what serves them....and nothing else...
...yeah, we're all pretty much right...
...one needs to buy in advance of "record date" – here is what TD AmeriTrade responded to my question – the essentials --->
"... If a dividend or distribution is due, the payment will go to the account that held the shares on the record date. However, keep in mind that to qualify for a distribution, shares must be purchased before the ex-date, which is usually two business days before the record date. Hopefully, this gives you the information you were looking for, but let us know if you have any additional questions...."
...so selling today would be "safe" if one wanted to get next divvy....
I'm now clear on this issue : )
...yeah...
..that doesn't really "help" that much, but I agree...but I sent question to TDAmeriTrade, to see how they act on this...I'll report back when I have an answer (from them)
...thing is, I could buy ARR today (thursday) and NOT be counted as holder for next distribution..or – I could buy tomorrow and also be included as holder...depending on how this is established...
I need to know once and for all...
...got cash – need stock...
...but don't find any – anybody got a stock positioned for quick and substantial gain very, very soon...? – 20% is "substantial" enough...
"record date"
...anyone care to try to define how that works exactly...it's not totally trivial...I'm on TDAmeriTrade and I'd like to think that "record date" would be the date when I can see that my TRADE was "confirmed"...but I am not one hundred percent certain that that is the case...
...yes, I should ask TDAmeriTrade about this, and maybe I will, but...I have some resistance to trying to communicate with them...it's inelegant and thus slightly unattractive...just my opinion of course...
...I have a beautiful strat I'm trying to sell...
...from 1978, three-bolter...but it's so hard to get a sense of what the value might be... : )
..opps...that was off topic...yes, johnsyn, I agree, probably won't fall too much...thanks for reminding me about ex-date...
...this is the second time this year...
...I simply lucked out – I checked the chart yesterday and saw the amazing rise and felt..."can this stand"...? – ...I checked StockChart after BigChart...they show "oversold" in more dramatic fashion and it confirmed to me...this might be a point to sell again..and I sold (my tiny position) – the charts seemed to suggest a top was at hand, but who can pinpoint the top – not me and I didn't think I would, just that I might come close...I sold at 7.469...
...and then I saw johnsyn's post...what...?? – ...stock offering...? – ...went to Armour's site and the info was confusing, the date was from the day before, but the info seemed current..?! – ...but there it was, a new stock offering and that news had not been processed before the end of the day...
...will I be able to take advantage of this and get back in at an advantageous point....?? – ...I hope so...that's what I did last time, in february or whenever it was...
...link...
...to company site...
http://investor.armourreit.com/releasedetail.cfm?ReleaseID=690169
...but essential information already posted by johnsyn...
...good call...
...hope you got your shares at that level and if so, you're way ahead of me...and you would have enjoyed a pretty rapid gain...
I have to get back up to a tad above .30...but again, I have only a pittance at stake...
...a 40 minute clip...?
...preceded by a commercial...
...why not wait...
...in a few days share price will be at or around ten cents...
Share price – in my fairly strongly held opinion – ALWAYS reflects "reality"...somebody knows what we don't...if outlook was indeed great, that would be reflected, right now, in the price per share...
This company, it would seem, isn't going to be a profitable entity anytime soon...and share value will go into hibernation...
...did I say...
...I would somehow not be "imperiled"..?
I live in Los Angeles – I am certain....that if out of control large scale mayhem does happen, Los Angeles would be a prime target...add to that, that I happen to live close to LAX...
...who faulted the company...? – I CAN fault the company for engaging in the hiring of "commercial propagandists" in order to prop up value instead of letting value follow actual progress and facts...
..and I can fault company for having, using and accepting a very poor "corporate identity" program....so I sent a message to company offering myself as designer of a new logotype, that would better reflect "self respect" etc...it's a problem...I don't think I will get a reply...
My exposure here is tiny – I bought a few shares to see "what would happen"....
...your name reminded me of a company I had a few shares in – Vidaroo – but I see you were not posting on theit board, it was some other guy....
...people's eyes are...
...glazing over...getting bored...realizing that company is not going to able to be "productive" tomorrow...
...but company is definitely doing stuff though, it seems to me, in contrast to many other outfits...
They did post news from just the other day, which suggests prep work and whatever, and here is a link to some (relatively poor) pictures (compared to what I would have produced)
http://www.imperialresourcesinc.com/pages/projects?id=28.
...anyway...the US elites are looking to start World War III and who knows if this company has a future or not...or any company, given US criminal governance...(oh sure, feel free to defend the US government if you like, won't have any impact on me...)
...how did you find out so quickly...
...but those dates, it seems, are not firm...it was supposed to be June 15, according to company website, but instead dividend "hit" on June 13th...
...today is the thirteenth...
...and dividend has been taken into account on the charts...
Q2 2012 Dividend Schedule
Record Payment Payment
Date Date Amount
Apr 16th 27th $0.10
May 15th 30th $0.10
Jun 15th 28th $0.10
...yes, the chart certainly shows...
...some wild swings, but you're always wondering about what "the real story" is with most companies being aggressively promoted – the story with this company did appear to be unusually solid though...
...my exposure to this co is tiny, so I am not worried, just following along, watching to see what transpires and learning how stock behaves, so I at a later time might feel compelled to increase my exposure : )
...best source to find out exactly...
...when next "D-Day" occurs...? – ...that is, on what date the dividend will "get attached" to stock...it varies a bit it seems to me and then there's the issue of stock transaction being settled...how that is calculated – or irrelevant...?
...anyone well informed on this subject matter...?
...we know the actual distribution date varies, but that doesn't matter so much (it seems to me) – what matters is on what date you need to buy, sell....in order to get, lose dividend...
...stock price is collapsing as we speak...
...what could be the reason – absence of real results...or...?
Article link - - -
http://seekingalpha.com/article/639851-armour-residential-reit-new-preferred-balances-equity-risk?source=email_rt_article_readmore&ifp=0
...yes, that's what it looks like...I experience same as you...
I don't understand what the article talks about...but the news doesn't seem to hurt...
...very interesting read...
...thanks
"...dispose up to 15,000 barrels of salt water a day..."
...there is something utterly amazing about those words, imo....
"...Lightning Triggers a Red Hot Profit Opportunity..."
...shouts a promo piece I just got today, by "Stock Prospector"
"...The company looks better than ever...it's stock is a screaming bargain...When the market figures this out...." – ...etc...etc...
..ok, cool – I'm all for it.. : )
Eric Dany is the man behind these exciting words...
"EDSP has received $20,000 from...."
"EDSP does not perform any due diligence..."
Eric Dany's Stock Prospector...
...so whatcha all think, huh...?
...thought I would see TDAmeriTrade's...
...dividend today in my account on grounds that May 30 was "the day" if I remember correctly...but there was nothing...
...we got a lively board here...
...I check in now and then...
..glad to see stock acts well...
...RSI flatlining...
Shares Outstanding: 518,813,000
Market Cap: 51,881
...less than the downpayment on our house here in Westchester, LA, CA...and that was the year 2000....
...what a fascinating story it has been...chronic dishonesty finally takes its toll...as the price of oil reaches new highs...I wonder what their souls would look like, if you could see them...aah...like typical american souls I would think...
...another fairly nice article...
http://seekingalpha.com/article/593841-2-reits-paying-big-14-dividends?source=email_rt_article&ifp=0
...nothing to be too upset about here...
...cool...
...thanks
D-Day
...strong showing on d-day...(IMO)
2012 ELAYAWAY INC Annual Meeting of Stockholders
MEETING DATE: May 22, 2012
For Holders as of: April 16, 2012
CUSIP NUMBER: 284169109