Redwood Trust (NYSE:RWT) Shares Gap Up After Analyst Upgrade

Redwood Trust, Inc. (NYSE:RWT)’s share price gapped up before the market opened on Friday after JPMorgan Chase & Co. upgraded the stock from a neutral rating to an overweight rating. The stock had previously closed at $5.63, but opened at $5.85. JPMorgan Chase & Co. now has a $6.00 price target on the stock. Redwood Trust shares last traded at $5.8050, with a volume of 121,718 shares changing hands.

Several other brokerages have also recently weighed in on RWT. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Redwood Trust in a research note on Wednesday, October 8th. Wall Street Zen cut shares of Redwood Trust from a “hold” rating to a “sell” rating in a research note on Saturday, January 17th. Jones Trading dropped their target price on shares of Redwood Trust from $7.00 to $6.25 and set a “buy” rating on the stock in a report on Thursday, October 30th. Finally, BTIG Research restated a “buy” rating and set a $8.50 target price on shares of Redwood Trust in a report on Friday, September 26th. Five equities research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $6.75.

Institutional Trading of Redwood Trust

Several hedge funds and other institutional investors have recently modified their holdings of RWT. CWM LLC lifted its stake in Redwood Trust by 270.5% in the 2nd quarter. CWM LLC now owns 6,168 shares of the real estate investment trust’s stock worth $36,000 after acquiring an additional 4,503 shares in the last quarter. Russell Investments Group Ltd. increased its holdings in shares of Redwood Trust by 331.8% in the 2nd quarter. Russell Investments Group Ltd. now owns 7,915 shares of the real estate investment trust’s stock valued at $47,000 after purchasing an additional 6,082 shares during the period. Westbourne Investments Inc. purchased a new stake in shares of Redwood Trust in the fourth quarter worth approximately $55,000. GAMMA Investing LLC boosted its holdings in shares of Redwood Trust by 71.6% during the fourth quarter. GAMMA Investing LLC now owns 11,054 shares of the real estate investment trust’s stock worth $61,000 after purchasing an additional 4,611 shares during the period. Finally, Tower Research Capital LLC TRC grew its position in Redwood Trust by 136.9% during the second quarter. Tower Research Capital LLC TRC now owns 10,823 shares of the real estate investment trust’s stock valued at $64,000 after purchasing an additional 6,255 shares in the last quarter. Institutional investors and hedge funds own 74.34% of the company’s stock.

Redwood Trust Trading Up 3.3%

The company has a debt-to-equity ratio of 22.73, a quick ratio of 57.77 and a current ratio of 57.77. The stock has a market cap of $736.64 million, a price-to-earnings ratio of -7.18 and a beta of 1.58. The company’s 50 day simple moving average is $5.55 and its two-hundred day simple moving average is $5.72.

Redwood Trust (NYSE:RWT) last issued its earnings results on Wednesday, October 29th. The real estate investment trust reported $0.20 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.16 by $0.04. Redwood Trust had a negative net margin of 8.62% and a positive return on equity of 9.19%. The company had revenue of $54.37 million during the quarter, compared to analyst estimates of $31.04 million. Research analysts expect that Redwood Trust, Inc. will post 0.78 EPS for the current fiscal year.

Redwood Trust Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Tuesday, December 30th. Shareholders of record on Tuesday, December 23rd were paid a $0.18 dividend. The ex-dividend date was Tuesday, December 23rd. This represents a $0.72 dividend on an annualized basis and a yield of 12.4%. Redwood Trust’s payout ratio is -88.89%.

About Redwood Trust

Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.

The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.