Redwood Trust, Inc. (NYSE:RWT) Sees Significant Drop in Short Interest

Key Points

• Short interest fell 18.7% in March to 5,674,896 shares (about 4.7% of the stock), yielding a short-interest ratio of 2.9 days based on average daily volume.
• Large institutions increased positions—Wellington Management holds 15.10M shares and UBS boosted its stake to ~3.88M shares—leaving hedge funds and other institutions with roughly 74.34% ownership.
• Analysts are mixed: MarketBeat's consensus is Hold with an average price target of $6.82 amid recent upgrades and downgrades, and the company pays a quarterly dividend of $0.18 (annualized yield ~12.2%) despite a negative payout ratio (-118%).

Redwood Trust, Inc. (NYSE:RWT - Get Free Report) was the target of a significant drop in short interest in the month of March. As of March 31st, there was short interest totaling 5,674,896 shares, a drop of 18.7% from the March 15th total of 6,977,416 shares. Based on an average daily trading volume, of 1,987,295 shares, the short-interest ratio is presently 2.9 days. Approximately 4.7% of the company's stock are short sold.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of RWT. Wellington Management Group LLP lifted its stake in Redwood Trust by 0.5% in the 4th quarter. Wellington Management Group LLP now owns 15,101,012 shares of the real estate investment trust's stock worth $83,509,000 after purchasing an additional 80,529 shares in the last quarter. UBS Group AG lifted its stake in Redwood Trust by 521.1% in the 4th quarter. UBS Group AG now owns 3,875,226 shares of the real estate investment trust's stock worth $21,430,000 after purchasing an additional 3,251,302 shares in the last quarter. Invesco Ltd. lifted its stake in Redwood Trust by 25.4% in the 4th quarter. Invesco Ltd. now owns 2,551,067 shares of the real estate investment trust's stock worth $14,107,000 after purchasing an additional 516,630 shares in the last quarter. Charles Schwab Investment Management Inc. lifted its stake in Redwood Trust by 15.0% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 2,169,992 shares of the real estate investment trust's stock worth $12,000,000 after purchasing an additional 282,800 shares in the last quarter. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its stake in Redwood Trust by 7.5% in the 3rd quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 2,148,393 shares of the real estate investment trust's stock worth $12,439,000 after purchasing an additional 149,003 shares in the last quarter. Hedge funds and other institutional investors own 74.34% of the company's stock.

Analysts Set New Price Targets

Several equities research analysts recently weighed in on the stock. Weiss Ratings reissued a "sell (d)" rating on shares of Redwood Trust in a research report on Thursday, January 22nd. Keefe, Bruyette & Woods raised their price target on shares of Redwood Trust from $5.75 to $7.00 and gave the company a "market perform" rating in a research report on Wednesday, February 18th. Wall Street Zen downgraded shares of Redwood Trust from a "hold" rating to a "sell" rating in a research report on Monday, April 6th. Piper Sandler reduced their price target on shares of Redwood Trust from $6.50 to $6.00 and set a "neutral" rating for the company in a research report on Thursday, April 2nd. Finally, Zacks Research downgraded shares of Redwood Trust from a "strong-buy" rating to a "hold" rating in a research report on Monday. Five equities research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, Redwood Trust presently has a consensus rating of "Hold" and an average price target of $6.82.

Redwood Trust Stock Performance

NYSE:RWT traded down $0.17 during trading hours on Thursday, reaching $5.90. The company had a trading volume of 1,281,994 shares, compared to its average volume of 1,621,852. The company has a current ratio of 55.15, a quick ratio of 55.15 and a debt-to-equity ratio of 24.34. Redwood Trust has a 52 week low of $5.00 and a 52 week high of $6.97. The firm has a market cap of $736.88 million, a price-to-earnings ratio of -9.66 and a beta of 1.52. The firm's 50 day moving average price is $5.88 and its 200-day moving average price is $5.67.

Redwood Trust (NYSE:RWT - Get Free Report) last posted its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 EPS for the quarter, missing analysts' consensus estimates of $0.22 by ($0.02). Redwood Trust had a positive return on equity of 12.00% and a negative net margin of 5.93%.The company had revenue of $140.33 million during the quarter, compared to the consensus estimate of $24.88 million. On average, analysts forecast that Redwood Trust will post 0.78 EPS for the current year.

Redwood Trust Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Tuesday, March 24th were given a dividend of $0.18 per share. The ex-dividend date of this dividend was Tuesday, March 24th. This represents a $0.72 dividend on an annualized basis and a dividend yield of 12.2%. Redwood Trust's payout ratio is presently -118.03%.

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.

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