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Is Armour Residential REIT (ARR) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Armour Residential REIT (ARR - Free Report) . ARR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 3.56, while its industry has an average P/E of 10.07. Over the past 52 weeks, ARR's Forward P/E has been as high as 9.73 and as low as 2.77, with a median of 7.66.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARR has a P/S ratio of 1.45. This compares to its industry's average P/S of 1.47.

Value investors will likely look at more than just these metrics, but the above data helps show that Armour Residential REIT is likely undervalued currently. And when considering the strength of its earnings outlook, ARR sticks out at as one of the market's strongest value stocks.


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