Apollo Commercial Real Estate Finance, Inc. (ARI) released results for its second fiscal quarter last week that narrowly beat estimates. Despite the earnings beat, however, I see growing risks for this commercial mortgage REIT that essentially relate to the current level of interest rates in this economy and the company's large floating-rate asset base. Further, Apollo Commercial Real Estate Finance's distribution coverage is not that impressive and downside risks are growing. The risk/reward ratio is not attractive here.
Apollo Commercial Real Estate Finance - Portfolio Snapshot
Apollo Commercial Real Estate Finance is a