Redwood Trust (NYSE:RWT) Shares Gap Down After Earnings Miss

Redwood Trust, Inc. (NYSE:RWT - Get Free Report) 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.

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%. The business had revenue of $27.60 million during the quarter, compared to analyst estimates of $26.00 million.

Redwood Trust Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Monday, December 30th. Shareholders of record on Monday, December 23rd were given a dividend of $0.18 per share. This is a positive change from Redwood Trust's previous quarterly dividend of $0.17. This represents a $0.72 annualized dividend and a dividend yield of 11.38%. The ex-dividend date of this dividend was Monday, December 23rd. Redwood Trust's payout ratio is presently 130.91%.

Analyst Ratings Changes

Several analysts recently commented on RWT shares. JMP Securities reiterated a "market outperform" rating and issued a $8.00 price objective on shares of Redwood Trust in a research note on Friday. JPMorgan Chase & Co. reduced their price target on shares of 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, StockNews.com cut Redwood Trust from a "hold" rating to a "sell" rating in a report on Monday. One research analyst has rated the stock with a sell rating, four have assigned a hold rating, three have assigned a buy rating and one has given a strong buy rating to the company. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and a consensus price target of $7.84.

Institutional Investors Weigh In On Redwood Trust

A number of large investors have recently bought and sold shares of the stock. LaSalle St. Investment Advisors LLC purchased a new stake in shares of Redwood Trust in the fourth quarter valued at $37,000. Brown Brothers Harriman & Co. purchased a new position in Redwood Trust in the 3rd quarter valued at about $39,000. Sovran Advisors LLC acquired a new stake in shares of Redwood Trust during the 4th quarter worth about $63,000. KBC Group NV grew its position in shares of Redwood Trust by 86.7% in the fourth quarter. KBC Group NV now owns 10,313 shares of the real estate investment trust's stock valued at $67,000 after purchasing an additional 4,788 shares during the period. Finally, Zacks Investment Management acquired a new position in Redwood Trust in the fourth quarter valued at $74,000. Institutional investors and hedge funds own 74.34% of the company's stock.

Redwood Trust Price Performance

The company has a 50-day moving average of $6.55 and a two-hundred day moving average of $7.08. The company has a debt-to-equity ratio of 14.55, a current ratio of 44.36 and a quick ratio of 44.36. The stock has a market capitalization of $838.19 million, a PE ratio of 11.50 and a beta of 1.57.

Redwood Trust Company Profile

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.