Redwood Trust (NYSE:RWT) Shares Gap Down Following Weak Earnings

Redwood Trust, Inc. (NYSE:RWT) shares gapped down before the market opened on Friday following a weaker than expected earnings announcement. 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 trading 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 net margin of 9.35% and a return on equity of 6.01%.

Redwood Trust Increases Dividend

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

Wall Street Analysts Forecast Growth

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

Hedge Funds Weigh In On Redwood Trust

Large investors have recently modified their holdings of the stock. Brown Brothers Harriman & Co. acquired a new position in shares of Redwood Trust during the third quarter worth approximately $39,000. GAMMA Investing LLC lifted its position in shares of Redwood Trust by 65.4% during the third quarter. GAMMA Investing LLC now owns 5,169 shares of the real estate investment trust’s stock worth $40,000 after purchasing an additional 2,043 shares in the last quarter. Sovran Advisors LLC acquired a new position in shares of Redwood Trust during the fourth quarter worth approximately $63,000. KBC Group NV lifted its position in shares of Redwood Trust by 86.7% during the fourth quarter. KBC Group NV now owns 10,313 shares of the real estate investment trust’s stock worth $67,000 after purchasing an additional 4,788 shares in the last quarter. Finally, Zacks Investment Management acquired a new position in shares of Redwood Trust during the fourth quarter worth approximately $74,000. 74.34% of the stock is currently owned by institutional investors and hedge funds.

Redwood Trust Price Performance

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

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.