This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Two Stocks for Capital Gains Hunters

Stocks in this article: PSEC ARR

Selling at a little over 8 times forward (one-year) earnings, PSEC had stellar results in the quarter ending Sept. 30. Revenue growth (year-over-year) was an amazing 123%, and the quarterly earnings growth increased by 18.4%. The following five-year chart gives a colorful look at price history and revenue results. PSEC Chart PSEC data by YCharts

When you look at the trailing-12-months revenue-per-share trajectory you'd have a better feel for why CEO John Barry owns close to 2.7 million shares and why Vanguard Group owns 4.2% of the outstanding shares of PSEC (as of Sept. 29). I'd like to buy shares on a pullback to $10.16 or lower.

The second total-return, capital-gains generator I'm interested in buying is Armour Residential REIT (ARR), which invests in hybrid adjustable rate, adjustable rate and fixed rate residential mortgage-backed securities issued by or guaranteed by U.S. government agencies or U.S. government-sponsored entities.

These included MBS owned by Fannie Mae (Federal National Mortgage Association), Freddie Mac (Federal Home Loan Mortgage Corporation) and the Ginnie Mae (Government National Mortgage Administration). Thus it's really a mortgage real estate investment trust with a $2.1 billion market cap and a dividend yield of more than 14% per year.

On Nov. 1 the firm reported third-quarter earnings results that included a 17.9% annualized ROE from taxable REIT income, according to the company.

The one-year chart below speaks volume about why I want to own shares of ARR at $6.50 a share or lower. ARR Chart ARR data by YCharts

With its greatly improved operating earnings yield, it's no wonder shares of ARR leaped almost 23% from its Nov. 15 intraday low of $5.70 to the recent price of $7.00 a share.

Buy these kinds of companies during a stock market correction and you may harvest total annual returns of 20% or more.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Make smarter trading decisions and provide investment ideas that could help make you richer. Bryan Ashenberg does the dirty work so you don't have to!

3 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs