Redwood Trust (NYSE:RWT) Stock Price Down 7.3% - Time to Sell?

Key Points

• Redwood Trust's stocks fell 7.3%, trading at $5.63, a decline that is reflected by the reduced average trading volume.
• Research analysts have mixed opinions, with firms adjusting their price targets; JMP Securities lowered theirs from $8.00 to $7.50, while UBS Group increased theirs from $6.50 to $7.00.
• The company recently declared a $0.18 quarterly dividend, resulting in an annual yield of 12.82%, although its payout ratio stands at 327.27%.

Redwood Trust, Inc. (NYSE:RWT - Get Free Report)'s stock price traded down 7.3% during trading on Wednesday . The stock traded as low as $5.62 and last traded at $5.63. 938,604 shares traded hands during mid-day trading, a decline of 2% from the average session volume of 960,203 shares. The stock had previously closed at $6.07.

Wall Street Analyst Weigh In

A number of brokerages have issued reports on RWT. JMP Securities cut their price target on Redwood Trust from $7.50 to $7.00 and set a "market outperform" rating for the company in a research note on Thursday. JPMorgan Chase & Co. increased their price target on Redwood Trust from $5.50 to $6.00 and gave the stock a "neutral" rating in a research note on Thursday, May 1st. Jones Trading reiterated a "buy" rating and issued a $7.00 price target on shares of Redwood Trust in a research note on Friday, May 2nd. Wall Street Zen upgraded Redwood Trust from a "sell" rating to a "hold" rating in a research note on Thursday, May 22nd. Finally, UBS Group cut their price target on Redwood Trust from $7.00 to $6.50 and set a "buy" rating for the company in a research note on Thursday. Six analysts have rated the stock with a hold rating, three have assigned a buy rating and one has assigned a strong buy rating to the company's stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $7.28.

Redwood Trust Price Performance

The firm's fifty day simple moving average is $5.80 and its 200 day simple moving average is $6.00. The firm has a market cap of $724.84 million, a P/E ratio of -8.51 and a beta of 1.30. The company has a debt-to-equity ratio of 18.74, a quick ratio of 39.35 and a current ratio of 39.35.

Redwood Trust (NYSE:RWT - Get Free Report) last announced its quarterly earnings results on Wednesday, July 30th. The real estate investment trust reported $0.18 EPS for the quarter, missing analysts' consensus estimates of $0.19 by ($0.01). Redwood Trust had a negative net margin of 9.26% and a positive return on equity of 8.57%. The business had revenue of ($38.10) million during the quarter, compared to the consensus estimate of $31.00 million. As a group, analysts forecast that Redwood Trust, Inc. will post 0.78 earnings per share for the current year.

Redwood Trust Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, June 30th. Investors of record on Monday, June 23rd were issued a $0.18 dividend. The ex-dividend date of this dividend was Monday, June 23rd. This represents a $0.72 dividend on an annualized basis and a dividend yield of 13.2%. Redwood Trust's dividend payout ratio (DPR) is presently -112.50%.

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in the business. Cambridge Investment Research Advisors Inc. lifted its holdings in shares of Redwood Trust by 3.1% in the 1st quarter. Cambridge Investment Research Advisors Inc. now owns 59,300 shares of the real estate investment trust's stock valued at $360,000 after acquiring an additional 1,767 shares during the last quarter. Concurrent Investment Advisors LLC lifted its stake in Redwood Trust by 4.7% in the second quarter. Concurrent Investment Advisors LLC now owns 41,474 shares of the real estate investment trust's stock worth $245,000 after purchasing an additional 1,866 shares during the last quarter. New York State Teachers Retirement System lifted its stake in Redwood Trust by 1.5% in the first quarter. New York State Teachers Retirement System now owns 152,430 shares of the real estate investment trust's stock worth $925,000 after purchasing an additional 2,326 shares during the last quarter. Focus Partners Wealth lifted its stake in Redwood Trust by 14.1% in the fourth quarter. Focus Partners Wealth now owns 20,164 shares of the real estate investment trust's stock worth $132,000 after purchasing an additional 2,488 shares during the last quarter. Finally, Apollon Wealth Management LLC lifted its stake in Redwood Trust by 3.9% in the first quarter. Apollon Wealth Management LLC now owns 81,897 shares of the real estate investment trust's stock worth $497,000 after purchasing an additional 3,049 shares during the last quarter. Institutional investors own 74.34% of the company's stock.

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.