Redwood Trust (NYSE:RWT) Shares Gap Down – Should You Sell?

Redwood Trust, Inc. (NYSE:RWT) gapped down prior to trading on Tuesday . The stock had previously closed at $5.73, but opened at $5.56. Redwood Trust shares last traded at $5.4450, with a volume of 190,535 shares.

Analysts Set New Price Targets

Several equities analysts have issued reports on RWT shares. BTIG Research reaffirmed a “buy” rating and set a $8.50 price objective on shares of Redwood Trust in a report on Friday, September 26th. Weiss Ratings restated a “sell (d)” rating on shares of Redwood Trust in a research report on Wednesday, October 8th. Jones Trading lowered their price objective on Redwood Trust from $7.00 to $6.25 and set a “buy” rating on the stock in a report on Thursday, October 30th. Finally, UBS Group boosted their price objective on Redwood Trust from $6.50 to $7.00 and gave the stock a “buy” rating in a research note on Wednesday, September 3rd. Four investment analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Redwood Trust currently has a consensus rating of “Hold” and an average price target of $6.75.

Redwood Trust Stock Performance

The company has a market cap of $699.91 million, a PE ratio of -6.82 and a beta of 1.59. 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 firm’s 50 day moving average is $5.44 and its 200-day moving average is $5.75.

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

Redwood Trust Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 30th. Investors of record on Tuesday, December 23rd will be given a dividend of $0.18 per share. The ex-dividend date is Tuesday, December 23rd. This represents a $0.72 dividend on an annualized basis and a yield of 13.0%. Redwood Trust’s dividend payout ratio (DPR) is presently -88.89%.

Institutional Trading of Redwood Trust

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. CWM LLC raised its holdings in shares of Redwood Trust by 270.5% during 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 during the period. Quantbot Technologies LP acquired a new stake in Redwood Trust during the first quarter worth about $37,000. Russell Investments Group Ltd. increased its position in Redwood Trust by 331.8% during the second quarter. Russell Investments Group Ltd. now owns 7,915 shares of the real estate investment trust’s stock worth $47,000 after purchasing an additional 6,082 shares during the last quarter. AlphaQuest LLC raised its stake in Redwood Trust by 165.5% during the first quarter. AlphaQuest LLC now owns 8,589 shares of the real estate investment trust’s stock worth $52,000 after purchasing an additional 5,354 shares during the period. Finally, Tower Research Capital LLC TRC boosted its holdings in Redwood Trust by 136.9% in the 2nd 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 during the last quarter. 74.34% of the stock is owned by institutional investors and hedge funds.

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.