Replies to post #2009 on ARMOUR Residential REIT Inc (ARR)

[bar1080]

This shows why reported BV is meaningless for highly leveraged mREITs. This quote is from another mREIT, CYS, but it applies probably even more so to ARR, which is extremely leveraged.

"As if that news wasn't bad enough, book value took a nasty hit, too. The drop from $12.87 at the end of March to $10.20 at the end of June was huge, even considering the $0.34 dividend paid on June 10. Earlier in the day, Deutsche Bank had downgraded a handful of mREITs, including Western Asset Mortgage (NYSE: WMC ) , based on book value declines of up to 16% during the second quarter. CYS, even factoring in its payout, suffered a drop of closer to 19%."

http://www.fool.com/investing/general/2013/07/19/cys-loses-now-all-mortgage-reits-must-pay.aspx