Key Highlights

  • Apollo Commercial Real Estate Finance (ARI) hit a new one-year low of $6.18; the 52-week range is $6.18 to $11.24.
  • ARI completed a $9 billion Loan portfolio sale in April and has announced a planned dissolution and liquidation.
  • The 14-day RSI of 20.8 is deeply oversold, and about $20.96 million traded versus a typical $16.28 million.

Apollo Commercial Real Estate Finance (NYSE:ARI) touched a new one-year low of $6.18 before trading at $6.26, leaving the commercial Mortgage REIT down 36.5% this year. The headline Dividend Yield works out to about 16%, but ARI sold a $9 billion loan portfolio in April, paid a large Special Dividend in July and has announced plans to dissolve, so the headline yield may not reflect what shareholders will actually receive.

Apollo Commercial Real Estate Finance's dividend yield stands at about 16 percent. Apollo Commercial Real Estate Finance, managed by an affiliate of Apollo Global Management, made commercial real estate loans. It is now winding down, and that changes how investors should read the yield.

That 15.97% yield is based on the $0.25 regular quarterly dividend, but Q2 distributable Earnings were only $0.15 per share, and a company in Liquidation returns Capital through special distributions rather than steady dividends. The stock's slide reflects the market's estimate of what will be left for shareholders after the remaining loans are sold. ARI was also removed from the S&P SmallCap 600 on June 30. The broader commercial property market remains under pressure from high rates, with office loans the weakest area.

Apollo Commercial Real Estate (ARI) Down 36.5% This Year

ARI traded between $6.18 and $6.30. It has lost 9.1% over the past month, and trailing-twelve-month Revenue fell 63.1% to $233.37 million as the loan book shrank. The market Capitalization is about $805 million, with 128,212,093 shares outstanding and $1.24 billion of cash.

ARI Technical Levels: Extremely Oversold

ARI trades below its 20-day Moving Average of $6.64, its 50-day of $6.73 and its 200-day of $9.61. The large gap to the 200-day average shows how far the stock has fallen since the wind-down began.

The 14-day RSI is 20.8. RSI measures buying versus selling pressure on a 0 to 100 scale, and readings near 20 are extremely oversold.

MACD is -0.21, just below its -0.20 signal line. MACD tracks momentum, and the lines converging suggests selling pressure is easing.

ADX is 52.1. ADX measures trend strength, and readings above 50 are rare and signal a very strong downtrend.

Support is the $6.18 low. Resistance is $6.45, then $6.68.

Valuation and Analyst View

ARI trades at a Price-to-Book Ratio of 0.6 and a trailing P/E of 7.9. For a liquidating company, the discount to book is the key number: it shows the market expects final proceeds to come in below stated book value. The consensus is Strong Buy, with a 1.25 score and an average target near $8.