Redwood Trust (NYSE:RWT) Share Price Passes Above 200-Day Moving Average - Should You Sell?

Key Points

• Technical move: Redwood Trust's stock crossed above its 200-day moving average ($5.72) on Friday, trading as high as $5.89 on about 5.86 million shares, suggesting potential short-term momentum.
• Analyst consensus — Moderate Buy: Analysts are mixed but generally positive (1 Strong Buy, 5 Buy, 2 Hold, 1 Sell) with a consensus price target of $6.96.
• High dividend but mixed fundamentals: The company announced a $0.18 quarterly dividend (ex-dividend March 24) implying a 13.4% yield, while recent results showed an EPS miss ($0.20 vs. $0.22) and negative net margin, and a negative payout ratio (-118%).

Redwood Trust, Inc. (NYSE:RWT - Get Free Report)'s stock price crossed above its 200-day moving average during trading on Friday . The stock has a 200-day moving average of $5.72 and traded as high as $5.89. Redwood Trust shares last traded at $5.3750, with a volume of 5,859,889 shares trading hands.

Wall Street Analysts Forecast Growth

Several analysts have recently issued reports on RWT shares. Citigroup reiterated a "market perform" rating on shares of Redwood Trust in a research note on Wednesday, February 18th. Wall Street Zen lowered shares of Redwood Trust from a "hold" rating to a "sell" rating in a research report on Saturday. Keefe, Bruyette & Woods boosted their price target on shares of Redwood Trust from $5.75 to $7.00 and gave the stock a "market perform" rating in a report on Wednesday, February 18th. JonesTrading reaffirmed a "buy" rating and issued a $6.25 price objective on shares of Redwood Trust in a research report on Tuesday, March 3rd. Finally, Zacks Research upgraded shares of Redwood Trust from a "hold" rating to a "strong-buy" rating in a research note on Monday, January 26th. One investment analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat.com, Redwood Trust currently has an average rating of "Moderate Buy" and a consensus target price of $6.96.

Redwood Trust Price Performance

The firm has a market cap of $671.82 million, a PE ratio of -8.81 and a beta of 1.55. The company has a debt-to-equity ratio of 24.34, a current ratio of 55.15 and a quick ratio of 55.15. The business's fifty day moving average is $5.90 and its 200-day moving average is $5.72.

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

Redwood Trust Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 31st. Investors of record on Tuesday, March 24th will be paid a $0.18 dividend. The ex-dividend date is Tuesday, March 24th. This represents a $0.72 annualized dividend and a yield of 13.4%. Redwood Trust's dividend payout ratio is presently -118.03%.

Institutional Trading of Redwood Trust

A number of large investors have recently bought and sold shares of the company. LSV Asset Management lifted its position in shares of Redwood Trust by 11.6% during the 3rd quarter. LSV Asset Management now owns 1,978,325 shares of the real estate investment trust's stock valued at $11,455,000 after buying an additional 205,980 shares during the last quarter. NFC Investments LLC increased its holdings in Redwood Trust by 12.8% in the 2nd quarter. NFC Investments LLC now owns 486,181 shares of the real estate investment trust's stock worth $2,873,000 after acquiring an additional 55,081 shares during the last quarter. Geode Capital Management LLC raised its stake in Redwood Trust by 2.6% in the 2nd quarter. Geode Capital Management LLC now owns 3,176,277 shares of the real estate investment trust's stock valued at $18,773,000 after acquiring an additional 80,206 shares during the period. Boston Partners raised its stake in Redwood Trust by 2.0% in the 2nd quarter. Boston Partners now owns 2,750,890 shares of the real estate investment trust's stock valued at $16,117,000 after acquiring an additional 54,209 shares during the period. Finally, Bank of New York Mellon Corp lifted its holdings in Redwood Trust by 8.2% during the second quarter. Bank of New York Mellon Corp now owns 1,164,509 shares of the real estate investment trust's stock valued at $6,882,000 after purchasing an additional 88,117 shares during the last quarter. 74.34% of the stock is owned by hedge funds and other institutional investors.

Redwood Trust Company Profile

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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