In my opinion and view Armour Residential (ARR) is a buy. I am not searching for the reason for the recent drop in price. Since I am building my portfolio by buying more and more shares and reinvesting dividends, I am also looking at the point when is the best time to add to a position. ARR recently dropped down and the question goes whether it is a buy now or the stock is experiencing troubles so you should stay away from it.
My view is that this stock is a buy. Why? The first reason for adding more shares to my existing position is that insiders are buying. In last 12 months there were 20 trades by insiders; 18 were buys and only two were sells. The most recent buys happened just recently in September 2012.
The next reason is that ARR is currently trading at book value. For dividend investing it is a great sign. The dividend rate is now 15% so by buying now your dividend yield to cost will be great.
This stock is not the true dividend achiever to me, it has poor record on rising dividends and it recently lowered the dividend rate, but as a high yield payer and REIT (which in my opinion will grow as the retail market gets alive again) this stock is a great addition to my portfolio which can pay nice dividends to be reinvested.
Thus I am buying more shares of this stock.
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