Adamas Trust (NASDAQ:ADAM) Sets New 12-Month Low on Analyst Downgrade

Key Points

• Adamas Trust shares hit a new 52-week low, falling to $6.54 after Keefe, Bruyette & Woods cut its price target from $9.25 to $8.50 and maintained a “market perform” rating.
• Analyst sentiment is largely cautious: five analysts rate the stock “Hold” and one rates it “Buy,” producing an average target of $9.25.
• Third-quarter adjusted EPS of $0.30 matched estimates, while the company raised its quarterly dividend to $0.30, implying a roughly 18.3% annualized yield; however, high leverage and a negative net margin remain concerns.

Adamas Trust, Inc. (NASDAQ:ADAM - Get Free Report)'s share price reached a new 52-week low on Friday after Keefe, Bruyette & Woods lowered their price target on the stock from $9.25 to $8.50. Keefe, Bruyette & Woods currently has a market perform rating on the stock. Adamas Trust traded as low as $6.54 and last traded at $6.54, with a volume of 1,749,002 shares changing hands. The stock had previously closed at $7.18.

A number of other analysts have also weighed in on the company. Wall Street Zen lowered Adamas Trust from a "buy" rating to a "hold" rating in a research report on Sunday, August 9th. JonesTrading decreased their target price on Adamas Trust from $10.00 to $9.50 and set a "buy" rating for the company in a report on Thursday. Weiss Ratings reissued a "hold (c)" rating on shares of Adamas Trust in a research note on Monday, October 19th. UBS Group upped their price target on Adamas Trust from $8.50 to $9.50 and gave the stock a "neutral" rating in a report on Wednesday, August 19th. Finally, Zacks Research downgraded Adamas Trust from a "strong-buy" rating to a "hold" rating in a report on Monday, September 28th. One research analyst has rated the stock with a Buy rating and five have given a Hold rating to the company. According to MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $9.25.

Key Adamas Trust News

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

• Positive Sentiment: Adamas Trust said adjusted book value increased approximately 4% early in the fourth quarter, while the company reduced its $2.9 billion “to-be-announced” (TBA) short position by roughly 76%. The reduction may lower exposure to mortgage-market volatility. Adamas Trust book value and TBA short update
• Positive Sentiment: JonesTrading maintained a “buy” rating, although it lowered its price target from $10.00 to $9.50. The revised target still implies substantial upside from the recent trading level. JonesTrading analyst recommendation
• Neutral Sentiment: Third-quarter adjusted earnings were $0.30 per share, matching consensus and improving from $0.24 a year earlier. The earnings call and results provided no clear earnings surprise to drive a strong bullish reaction. Adamas Trust third-quarter results
• Negative Sentiment: Keefe, Bruyette & Woods cut its price target from $9.25 to $8.50 and assigned a “market perform” rating. Although the target indicates potential upside, the reduction signals less confidence in near-term appreciation. Keefe, Bruyette & Woods analyst recommendation
• Negative Sentiment: Investor concerns remain elevated because Adamas Trust reported a negative net margin, carries very high debt relative to equity, and its valuation and earnings profile remain under pressure. A broader warning article comparing certain dividend payers with failed Office Properties Income Trust may also weigh on sentiment toward higher-risk income-oriented real estate stocks. Warning signs among dividend stocks

Hedge Funds Weigh In On Adamas Trust

Several hedge funds have recently added to or reduced their stakes in the stock. Public Employees Retirement System of Ohio purchased a new position in shares of Adamas Trust during the second quarter worth about $34,000. Nykredit A S acquired a new stake in shares of Adamas Trust in the 2nd quarter valued at about $36,000. Integrated Wealth Concepts LLC acquired a new stake in shares of Adamas Trust in the 2nd quarter valued at about $48,000. Hillsdale Investment Management Inc. purchased a new position in Adamas Trust during the 1st quarter worth approximately $60,000. Finally, GAMMA Investing LLC grew its stake in Adamas Trust by 26.1% during the 3rd quarter. GAMMA Investing LLC now owns 9,974 shares of the company's stock worth $78,000 after buying an additional 2,065 shares during the last quarter. 54.89% of the stock is currently owned by hedge funds and other institutional investors.

Adamas Trust Stock Performance

The company has a market cap of $587.82 million, a price-to-earnings ratio of -11.47 and a beta of 1.22. The firm has a 50-day simple moving average of $8.53 and a 200 day simple moving average of $8.55. The company has a quick ratio of 18.54, a current ratio of 18.54 and a debt-to-equity ratio of 11.89.

Adamas Trust (NASDAQ:ADAM - Get Free Report) last issued its quarterly earnings data on Wednesday, October 28th. The company reported $0.30 earnings per share for the quarter, meeting analysts' consensus estimates of $0.30. The company had revenue of ($119.44) million during the quarter. Adamas Trust had a positive return on equity of 15.00% and a negative net margin of 0.26%. On average, sell-side analysts predict that Adamas Trust, Inc. will post 1.20 earnings per share for the current fiscal year.

Adamas Trust Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, October 28th. Investors of record on Tuesday, September 22nd were given a $0.30 dividend. This is a positive change from Adamas Trust's previous quarterly dividend of $0.27. The ex-dividend date was Tuesday, September 22nd. This represents a $1.20 annualized dividend and a yield of 18.3%. Adamas Trust's payout ratio is currently 71.43%.

About Adamas Trust

New York Mortgage Trust, Inc acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets in the United States. Its targeted investments include residential loans, second mortgages, and business purpose loans; structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties, as well as joint venture equity investments in multi-family properties; non-agency residential mortgage-backed securities (RMBS); agency RMBS; commercial mortgage-backed securities (CMBS); and other mortgage, residential housing, and credit-related assets.

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