Redwood Trust (NYSE:RWT) Shares Down 5.7% After Earnings Miss

Redwood Trust, Inc. (NYSE:RWT)’s share price traded down 5.7% on Thursday after the company announced weaker than expected quarterly earnings. The stock traded as low as $5.85 and last traded at $5.86. 1,388,359 shares were traded during mid-day trading, an increase of 44% from the average session volume of 962,396 shares. The stock had previously closed at $6.21.

The real estate investment trust reported $0.14 EPS for the quarter, missing the consensus estimate of $0.17 by ($0.03). Redwood Trust had a net margin of 9.35% and a return on equity of 6.91%. The business had revenue of $73.80 million during the quarter, compared to analysts’ expectations of $26.55 million.

Redwood Trust Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, March 31st. Investors of record on Monday, March 24th were issued a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a yield of 12.21%. The ex-dividend date was Monday, March 24th. Redwood Trust’s payout ratio is currently 218.18%.

Analysts Set New Price Targets

Several equities research analysts have issued reports on the stock. StockNews.com upgraded shares of Redwood Trust from a “sell” rating to a “hold” rating in a research note on Wednesday, March 5th. Jones Trading reissued a “buy” rating and issued a $7.00 price objective on shares of Redwood Trust in a research report on Friday. JMP Securities reduced their price objective on Redwood Trust from $8.00 to $7.50 and set a “market outperform” rating on the stock in a research note on Thursday, April 17th. Finally, JPMorgan Chase & Co. increased their target price on Redwood Trust from $5.50 to $6.00 and gave the company a “neutral” rating in a research note on Thursday. Five equities research analysts have rated the stock with a hold rating, two have assigned a buy rating and one has assigned a strong buy rating to the stock. According to data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $7.57.

Institutional Trading of Redwood Trust

Hedge funds have recently made changes to their positions in the stock. LaSalle St. Investment Advisors LLC acquired a new position in Redwood Trust during the 4th quarter worth $37,000. Sovran Advisors LLC acquired a new stake in Redwood Trust during the fourth quarter valued at approximately $63,000. KBC Group NV lifted its holdings in Redwood Trust by 86.7% during the 4th quarter. KBC Group NV now owns 10,313 shares of the real estate investment trust’s stock worth $67,000 after buying an additional 4,788 shares during the last quarter. Zacks Investment Management acquired a new position in shares of Redwood Trust in the 4th quarter worth approximately $74,000. Finally, Cibc World Markets Corp bought a new stake in shares of Redwood Trust in the 4th quarter valued at approximately $80,000. Institutional investors and hedge funds own 74.34% of the company’s stock.

Redwood Trust Stock Performance

The company has a 50-day moving average of $5.96 and a 200-day moving average of $6.53. The firm has a market capitalization of $783.93 million, a price-to-earnings ratio of 17.86 and a beta of 1.15. The company has a current ratio of 44.36, a quick ratio of 44.36 and a debt-to-equity ratio of 14.09.

Redwood Trust Company Profile

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.