Orchid Island Capital (NYSE:ORC) Shares Gap Down - Time to Sell?

Key Points

• Orchid Island shares gapped down Thursday, opening at $6.95 after a $7.36 close and last trading around $6.745 (about a 6.7% decline) on roughly 5.48 million shares.
• Analyst sentiment has turned cautious: Weiss Ratings downgraded ORC to Sell, Wall Street Zen moved it to Hold, and the MarketBeat consensus rating is Reduce with a $7.50 price target.
• The REIT disclosed a monthly dividend of $0.10 (ex-dividend Apr 30) implying a 17.5% yield but a 138.46% payout ratio, a potentially unsustainable payout despite a P/E of 6.6 and $1.34 billion market cap.

Orchid Island Capital, Inc. (NYSE:ORC - Get Free Report) gapped down prior to trading on Thursday . The stock had previously closed at $7.36, but opened at $6.95. Orchid Island Capital shares last traded at $6.7450, with a volume of 5,479,196 shares traded.

Wall Street Analyst Weigh In

ORC has been the topic of several recent analyst reports. Weiss Ratings downgraded Orchid Island Capital from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Monday, April 6th. Wall Street Zen raised Orchid Island Capital from a "sell" rating to a "hold" rating in a research report on Saturday, April 11th. Two analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Reduce" and a consensus price target of $7.50.

Orchid Island Capital Trading Down 6.7%

The company has a debt-to-equity ratio of 0.09, a quick ratio of 509.34 and a current ratio of 509.34. The company has a 50-day simple moving average of $7.30 and a 200 day simple moving average of $7.39. The company has a market capitalization of $1.34 billion, a P/E ratio of 6.60 and a beta of 1.63.

Orchid Island Capital (NYSE:ORC - Get Free Report) last issued its quarterly earnings results on Thursday, January 29th. The real estate investment trust reported $0.19 EPS for the quarter, topping the consensus estimate of $0.18 by $0.01. The business had revenue of $124.78 million during the quarter, compared to the consensus estimate of $35.74 million. Sell-side analysts expect that Orchid Island Capital, Inc. will post 0.37 earnings per share for the current year.

Orchid Island Capital Cuts Dividend

The company also recently disclosed a monthly dividend, which will be paid on Thursday, May 28th. Stockholders of record on Thursday, April 30th will be given a dividend of $0.10 per share. The ex-dividend date is Thursday, April 30th. This represents a c) dividend on an annualized basis and a dividend yield of 17.5%. Orchid Island Capital's payout ratio is currently 138.46%.

Institutional Trading of Orchid Island Capital

A number of institutional investors and hedge funds have recently modified their holdings of ORC. Vanguard Group Inc. increased its position in shares of Orchid Island Capital by 23.4% during the fourth quarter. Vanguard Group Inc. now owns 9,767,670 shares of the real estate investment trust's stock valued at $70,327,000 after purchasing an additional 1,850,221 shares during the period. Millennium Management LLC increased its position in shares of Orchid Island Capital by 153.6% during the fourth quarter. Millennium Management LLC now owns 3,051,892 shares of the real estate investment trust's stock valued at $21,974,000 after purchasing an additional 1,848,531 shares during the period. Tudor Investment Corp ET AL bought a new stake in shares of Orchid Island Capital during the fourth quarter valued at approximately $7,859,000. Goldman Sachs Group Inc. increased its position in shares of Orchid Island Capital by 144.1% during the fourth quarter. Goldman Sachs Group Inc. now owns 1,576,801 shares of the real estate investment trust's stock valued at $11,353,000 after purchasing an additional 930,868 shares during the period. Finally, Two Sigma Investments LP increased its position in shares of Orchid Island Capital by 170.0% during the third quarter. Two Sigma Investments LP now owns 1,282,514 shares of the real estate investment trust's stock valued at $8,990,000 after purchasing an additional 807,442 shares during the period. 32.74% of the stock is currently owned by institutional investors.

About Orchid Island Capital

Orchid Island Capital is a real estate investment trust that specializes in investing in residential mortgage‐backed securities (RMBS), with a primary focus on mortgage pass‐through securities guaranteed by the Government National Mortgage Association (Ginnie Mae). Structured to elect and maintain status as a REIT under the U.S. Internal Revenue Code, the company's principal business strategy involves acquiring pools of U.S. residential mortgages in the secondary market and holding them to generate interest income.

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