Arlington Asset Investment Upped to Strong Buy - Analyst Blog

On June 10, the Zacks Investment Research upgraded Arlington Asset Investment Corp. (AI) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

This Arlington, VA-based investment broker has been witnessing rising earnings estimates on the back of impressive first-quarter 2014 results.

Arlington Asset Investment Corp reported its first-quarter earnings on Apr 28. Adjusted earnings of $1.18 per share surpassed the Zacks Consensus Estimate by 18.0%. Moreover, the figures compared favorably with the prior-quarter earnings of $1.04 per share.

Arlington Asset Investment Corp's results primarily benefited from a 29.0% increase in net interest income and a 56.3% decline in other loss. However, these positives were partially offset by a 10.0% rise in other expenses.

As of Mar 31, 2014, cash and cash equivalents of the company were $112.3 million, up significantly from $48.6 million in the prior quarter. Total assets were $2.6 billion, rising 20.3% from Dec 31, 2013.

Moreover, the company has been consistently returning capital to shareholders in form of timely dividends. Given its steady capital position, we expect the company to continue enhancing shareholders' value in the quarters to follow.

For 2014, the Zacks Consensus Estimate climbed 2.5% to $4.05 per share over the last 60 days. For 2015, the Zacks Consensus Estimate advanced 4.9% to $4.25 per share over the same time period.

Other Stocks to Consider

Other investment brokers worth considering include E*TRADE Financial Corporation (ETFC), KCG Holdings, Inc. (KCG) and Investment Technology Group Inc. (ITG). All these stocks sport the same Zacks Rank as Arlington Asset Investment Corp.

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