ARR is down today on the jobs news. The jobs news indicates the economy is improving, so investors expect a continuation or acceleration of the taper, which leads to lower demand for mortgage bonds, which leads to lower prices for mortgage bonds, which leads to lower book values for some MREITS, especially agency MREITS. It looks like the market might actually like the buyback. ARR is performing well today when compared to other agency REITS, primarily AGNC and NLY
14 million is a big number. But those 14 million shares were sold when the short positions were initiated, any resulting downward pressure goes into the share price when the shares are actually sold. After the short position is initiated, then the position really becomes a contract to buy the 14 million shares at some point in the future in order to cover the short positiions. The existing short position, coupled with the buyback does create future demand for the stock and provides some price support.
Blackstone has purchased over 5% of outstanding shares, and their interest in the company was reported to the SEC on Feb 3. The market probably sees Blackstone's position as a vote of confidence in the future of CNQ and so the shares get a little boost.
MREITS are structured, and run, to generate income. 90% of the money earned by NLY will be paid out in dividends. It does not seem likely that NLY can pay out about 22% in dividends over the next two years and also increase the share price by 65%. Be careful, NLY is considered a success if it sells for $11 two years from now and has paid the quarterly dividends. In fact, the objective is to increase the dividend, not the share price. You might consider buying 122 shares and reinvesting the dividends. Good luck
The banked earned less money in 2013 than in 2012. The company bought back some shares so it looks like the bank earned more per share than it earned in 2012. But Peoples Bank bought back the shares with money that already belonged to the shareholders. Management used your money to buy shares so they could tell you that they earned you more money......so they could continue to earn big salaries doing a poor job.
PBCT stock rises 20% during 2013 on the strength of a share buyback. The index of similar banks (BKX:IND) rose 34.99% during the same time without a share buyback. Total earnings for PBCT went DOWN during 2013 from 64 million to 60 million dollars. Barnes declares the year a success, vests his options, puts his feet up on the desk. How do I get that job?