Redwood Trust (NYSE:RWT) Upgraded to Hold at Zacks Research

Zacks Research upgraded shares of Redwood Trust (NYSE:RWT) from a strong sell rating to a hold rating in a research note issued to investors on Tuesday,Zacks reports.

RWT has been the subject of several other research reports. JPMorgan Chase & Co. lowered their price objective on shares of Redwood Trust from $6.50 to $6.00 and set an “overweight” rating for the company in a research note on Friday, July 17th. UBS Group reduced their target price on shares of Redwood Trust from $7.00 to $6.50 and set a “buy” rating on the stock in a report on Friday, August 21st. Citizens Jmp decreased their price target on shares of Redwood Trust from $7.00 to $6.00 and set a “market outperform” rating for the company in a research report on Wednesday, July 8th. Wells Fargo & Company dropped their price target on shares of Redwood Trust from $7.00 to $6.00 and set an “equal weight” rating for the company in a research note on Wednesday, July 29th. Finally, JonesTrading cut their price objective on Redwood Trust from $6.25 to $6.00 and set a “buy” rating on the stock in a research report on Tuesday, July 28th. Six investment analysts have rated the stock with a Buy rating, four have given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has an average rating of “Hold” and a consensus price target of $5.84.

Redwood Trust Trading Down 0.1%

Shares of NYSE RWT opened at $3.90 on Tuesday. Redwood Trust has a twelve month low of $3.22 and a twelve month high of $6.97. The company has a current ratio of 67.49, a quick ratio of 67.49 and a debt-to-equity ratio of 31.69. The stock has a fifty day simple moving average of $4.66 and a 200-day simple moving average of $5.17. The stock has a market capitalization of $490.51 million, a PE ratio of -97.60 and a beta of 1.37.

Redwood Trust (NYSE:RWT) last posted its quarterly earnings data on Tuesday, July 28th. The real estate investment trust reported $0.25 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.23 by $0.02. The firm had revenue of $56.01 million for the quarter, compared to the consensus estimate of $89.45 million. Redwood Trust had a return on equity of 16.02% and a net margin of 0.42%. On average, equities analysts forecast that Redwood Trust will post 1.03 earnings per share for the current year.

Redwood Trust Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Wednesday, September 23rd will be paid a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a dividend yield of 18.4%. The ex-dividend date is Wednesday, September 23rd. Redwood Trust’s dividend payout ratio is presently -1,800.00%.

Insider Activity

In other news, Director Greg H. Kubicek purchased 50,000 shares of the stock in a transaction on Tuesday, September 15th. The stock was bought at an average price of $3.85 per share, for a total transaction of $192,500.00. Following the acquisition, the director directly owned 127,185 shares of the company’s stock, valued at approximately $489,662.25. The trade was a 64.78% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CEO Christopher J. Abate acquired 100,000 shares of the company’s stock in a transaction on Tuesday, September 15th. The stock was purchased at an average cost of $3.84 per share, for a total transaction of $384,000.00. Following the completion of the transaction, the chief executive officer owned 679,283 shares in the company, valued at approximately $2,608,446.72. The trade was a 17.26% increase in their position. The SEC filing for this purchase provides additional information. Insiders bought 239,276 shares of company stock worth $928,430 in the last ninety days. 3.30% of the stock is owned by insiders.

Hedge Funds Weigh In On Redwood Trust

A number of institutional investors and hedge funds have recently modified their holdings of the company. Janney Montgomery Scott LLC increased its holdings in Redwood Trust by 18.5% in the first quarter. Janney Montgomery Scott LLC now owns 15,113 shares of the real estate investment trust’s stock valued at $85,000 after buying an additional 2,363 shares in the last quarter. Bank of New York Mellon Corp lifted its position in shares of Redwood Trust by 0.4% during the 2nd quarter. Bank of New York Mellon Corp now owns 714,220 shares of the real estate investment trust’s stock valued at $3,385,000 after acquiring an additional 2,627 shares during the period. Clearstead Advisors LLC boosted its stake in shares of Redwood Trust by 192.5% during the 4th quarter. Clearstead Advisors LLC now owns 5,428 shares of the real estate investment trust’s stock worth $30,000 after acquiring an additional 3,572 shares in the last quarter. Amundi boosted its stake in shares of Redwood Trust by 35.3% during the 1st quarter. Amundi now owns 18,584 shares of the real estate investment trust’s stock worth $104,000 after acquiring an additional 4,847 shares in the last quarter. Finally, PNC Financial Services Group Inc. grew its holdings in shares of Redwood Trust by 41.5% in the 1st quarter. PNC Financial Services Group Inc. now owns 21,311 shares of the real estate investment trust’s stock worth $120,000 after acquiring an additional 6,249 shares during the period. Institutional investors and hedge funds own 74.34% of the company’s stock.

More Redwood Trust News

Here are the key news stories impacting Redwood Trust this week:

• Positive Sentiment: Redwood Trust insiders made substantial open-market purchases near $3.84–$3.98 per share. CEO Christopher Abate bought 100,000 shares, President Dashiell Robinson purchased 63,211, CFO Brooke Carillo acquired 26,065, and Director Greg Kubicek bought 50,000. The purchases increased their holdings by roughly 17% to 65% and may signal that management and the board consider RWT undervalued. Redwood Trust insider purchase filing
• Positive Sentiment: Redwood completed a private offering of $205 million in 7.00% convertible notes and a related restructuring. The proceeds should improve liquidity and financial flexibility for its residential mortgage-credit business. Redwood Trust convertible notes offering
• Neutral Sentiment: Redwood declared a quarterly dividend of $0.18 per share, equivalent to a $0.72 annualized payout and an indicated yield of about 18%. The high yield may attract income-oriented investors, but the reported negative payout ratio highlights concerns about dividend sustainability.
• Negative Sentiment: Keefe, Bruyette & Woods lowered its price target on RWT from $5.50 to $4.75 while retaining an “outperform” rating. The reduced target signals weaker expectations and may pressure sentiment, although it remains above recent trading levels. Keefe, Bruyette & Woods lowers Redwood Trust price target
• Negative Sentiment: The convertible financing could eventually dilute existing shareholders if the notes convert into equity. Redwood’s latest results also showed revenue of $56.01 million versus an $89.45 million consensus estimate, despite adjusted earnings modestly exceeding expectations.

About Redwood Trust

Redwood Trust, Inc is a real estate investment trust that focuses on residential real estate credit. The company invests in, finances and manages residential mortgage assets, including jumbo and other non-agency mortgage loans, mortgage-backed securities and related credit investments. Its activities are primarily focused on the U.S. housing market.

Redwood operates through businesses that support the origination, financing and securitization of residential mortgage credit. Its platform has historically included Sequoia, which acquires and securitizes residential loans, as well as CoreVest, which provides financing to residential real estate investors and developers.