Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of ARMOUR Residential REIT's Sloan Ratio %
For the REIT - Mortgage subindustry, ARMOUR Residential REIT's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ARMOUR Residential REIT's Sloan Ratio % Distribution in the REITs Industry
For the REITs industry and Real Estate sector, ARMOUR Residential REIT's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where ARMOUR Residential REIT's Sloan Ratio % falls into.
ARMOUR Residential REIT Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
ARMOUR Residential REIT's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
ARMOUR Residential REIT's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 42.962 (Jun. 2023 ) + -179.168 (Sep. 2023 ) + 99.642 (Dec. 2023 ) + 14.516 (Mar. 2024 ) = $-22.05 Mil.
ARMOUR Residential REIT's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was -8.921 (Jun. 2023 ) + 27.174 (Sep. 2023 ) + 60.344 (Dec. 2023 ) + 96.812 (Mar. 2024 ) = $175.41 Mil.
ARMOUR Residential REIT's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was 1370.494 (Jun. 2023 ) + -2101.965 (Sep. 2023 ) + 1619.293 (Dec. 2023 ) + 178.78 (Mar. 2024 ) = $1,066.60 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ARMOUR Residential REIT (NYSE:ARR) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2024, ARMOUR Residential REIT has a Sloan Ratio of -10.35%, indicating there is a warning stage of accrual build up.
ARMOUR Residential REIT Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of ARMOUR Residential REIT's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
ARMOUR Residential REIT (ARMOUR Residential REIT) Business Description
ARMOUR Residential REIT Inc is a real estate investment trust that invests in residential mortgage-backed securities or RMBS. These are issued or guaranteed by U.S.-government-sponsored enterprises, such as Fannie Mae, Freddie Mac, or Ginnie Mae. The company's investment portfolio is composed of mortgage-backed securities, adjustable-rate mortgage securities, and multifamily mortgage-backed securities. In terms of total fair value, most Armour's investments are long-term, fixed-rate agency RMBS. Multifamily RMBS also represents a substantial amount. Fannie Mae guarantees most of the company's holdings. Armour derives substantially all its revenue as interest income from its investments.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
ARR has been successfully added to your 