Redwood Trust (NYSE:RWT) Shares Gap Down After Earnings Miss

Redwood Trust, Inc. (NYSE:RWT) shares gapped down prior to trading on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $6.46, but opened at $6.24. Redwood Trust shares last traded at $6.04, with a volume of 610,114 shares changing hands.

The real estate investment trust reported $0.13 earnings per share for the quarter, missing analysts’ consensus estimates of $0.16 by ($0.03). Redwood Trust had a return on equity of 6.01% and a net margin of 9.35%.

Redwood Trust Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, December 30th. Shareholders of record on Monday, December 23rd were paid a $0.18 dividend. This represents a $0.72 annualized dividend and a yield of 11.31%. The ex-dividend date was Monday, December 23rd. This is an increase from Redwood Trust’s previous quarterly dividend of $0.17. Redwood Trust’s dividend payout ratio is presently 130.91%.

Analyst Upgrades and Downgrades

RWT has been the subject of several research reports. JPMorgan Chase & Co. lowered their price objective on shares of Redwood Trust from $7.00 to $6.50 and set a “neutral” rating for the company in a research report on Tuesday, January 21st. StockNews.com upgraded shares of Redwood Trust from a “sell” rating to a “hold” rating in a report on Monday, November 11th. Finally, JMP Securities restated a “market outperform” rating and set a $8.00 target price on shares of Redwood Trust in a report on Friday. Five analysts have rated the stock with a hold rating, three have assigned a buy rating and one has issued a strong buy rating to the company. According to MarketBeat, Redwood Trust presently has an average rating of “Moderate Buy” and a consensus price target of $7.84.

Institutional Trading of Redwood Trust

Large investors have recently added to or reduced their stakes in the company. Wellington Management Group LLP lifted its stake in Redwood Trust by 6.9% in the third quarter. Wellington Management Group LLP now owns 14,611,264 shares of the real estate investment trust’s stock valued at $112,945,000 after acquiring an additional 941,223 shares during the last quarter. State Street Corp lifted its stake in Redwood Trust by 2.0% in the third quarter. State Street Corp now owns 5,189,667 shares of the real estate investment trust’s stock valued at $40,116,000 after acquiring an additional 102,274 shares during the last quarter. Franklin Resources Inc. lifted its stake in Redwood Trust by 4.6% in the third quarter. Franklin Resources Inc. now owns 72,486 shares of the real estate investment trust’s stock valued at $548,000 after acquiring an additional 3,206 shares during the last quarter. Geode Capital Management LLC lifted its stake in Redwood Trust by 0.8% in the third quarter. Geode Capital Management LLC now owns 3,038,438 shares of the real estate investment trust’s stock valued at $23,492,000 after acquiring an additional 25,444 shares during the last quarter. Finally, Clear Harbor Asset Management LLC acquired a new stake in Redwood Trust in the third quarter valued at $722,000. Institutional investors and hedge funds own 74.34% of the company’s stock.

Redwood Trust Trading Down 1.5 %

The business’s 50 day simple moving average is $6.58 and its 200 day simple moving average is $7.10. The company has a quick ratio of 44.36, a current ratio of 44.36 and a debt-to-equity ratio of 14.55. The stock has a market cap of $843.49 million, a price-to-earnings ratio of 11.57 and a beta of 1.57.

About Redwood Trust

Redwood Trust, Inc, together with its subsidiaries, operates as a specialty finance company in the United States. The company operates through three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking, and Investment Portfolio. The Residential Consumer Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio.