Redwood Trust (NYSE:RWT) Shares Gap Down on Disappointing Earnings

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 traded.

The real estate investment trust reported $0.13 EPS for the quarter, missing the consensus estimate 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 business also recently disclosed a quarterly dividend, which was paid on Monday, December 30th. Shareholders of record on Monday, December 23rd were given a $0.18 dividend. This represents a $0.72 annualized dividend and a yield of 11.83%. This is a boost from Redwood Trust’s previous quarterly dividend of $0.17. The ex-dividend date was Monday, December 23rd. Redwood Trust’s payout ratio is 130.91%.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on RWT. StockNews.com raised shares of Redwood Trust from a “sell” rating to a “hold” rating in a research report on Monday, November 11th. JPMorgan Chase & Co. decreased their target price on Redwood Trust from $7.00 to $6.50 and set a “neutral” rating for the company in a research report on Tuesday, January 21st. Finally, JMP Securities dropped their price target on Redwood Trust from $9.00 to $8.00 and set a “market outperform” rating on the stock in a research report on Thursday, January 23rd. Five research analysts have rated the stock with a hold rating, three have assigned a buy rating and one has assigned a strong buy rating to the company’s stock. According to data from MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus target price of $7.84.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in RWT. BNP Paribas Financial Markets grew its stake in Redwood Trust by 7.2% in the third quarter. BNP Paribas Financial Markets now owns 28,909 shares of the real estate investment trust’s stock valued at $223,000 after purchasing an additional 1,932 shares during the last quarter. GAMMA Investing LLC grew its position in shares of Redwood Trust by 65.4% in the 3rd quarter. GAMMA Investing LLC now owns 5,169 shares of the real estate investment trust’s stock worth $40,000 after buying an additional 2,043 shares during the last quarter. Illinois Municipal Retirement Fund raised its stake in shares of Redwood Trust by 3.4% during the 4th quarter. Illinois Municipal Retirement Fund now owns 72,744 shares of the real estate investment trust’s stock worth $475,000 after acquiring an additional 2,383 shares in the last quarter. Franklin Resources Inc. lifted its position in Redwood Trust by 4.6% during 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. Finally, Zurcher Kantonalbank Zurich Cantonalbank lifted its position in Redwood Trust by 18.0% during the third quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 29,725 shares of the real estate investment trust’s stock valued at $230,000 after acquiring an additional 4,527 shares during the last quarter. 74.34% of the stock is owned by institutional investors.

Redwood Trust Trading Down 5.8 %

The company’s 50 day simple moving average is $6.59 and its two-hundred 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 company has a market capitalization of $806.25 million, a price-to-earnings ratio of 10.95 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.