Investors Purchase Large Volume of Put Options on Redwood Trust (NYSE:RWT)

Redwood Trust, Inc. (NYSE:RWT) was the target of unusually large options trading activity on Thursday. Stock traders bought 3,498 put options on the company. This represents an increase of 731% compared to the typical daily volume of 421 put options.

Analyst Ratings Changes

A number of equities research analysts have recently issued reports on RWT shares. JonesTrading cut their target price on Redwood Trust from $6.25 to $6.00 and set a “buy” rating on the stock in a research report on Tuesday, July 28th. Keefe, Bruyette & Woods reduced their price objective on shares of Redwood Trust from $5.50 to $4.75 and set an “outperform” rating for the company in a research note on Monday, September 14th. UBS Group decreased their target price on shares of Redwood Trust from $7.00 to $6.50 and set a “buy” rating for the company in a report on Friday, August 21st. Zacks Research lowered shares of Redwood Trust from a “hold” rating to a “strong sell” rating in a report on Wednesday, October 14th. Finally, Citizens Jmp decreased their price objective on shares of Redwood Trust from $6.00 to $4.00 and set a “market outperform” rating for the company in a research note on Thursday, October 15th. Seven investment analysts have rated the stock with a Buy rating, two have issued a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and an average target price of $4.94.

Redwood Trust Stock Down 2.0%

NYSE:RWT traded down $0.07 on Thursday, hitting $3.19. 233,330 shares of the company’s stock traded hands, compared to its average volume of 2,649,134. The company has a market cap of $401.33 million, a PE ratio of -9.47 and a beta of 1.49. Redwood Trust has a 1 year low of $2.69 and a 1 year high of $6.97. The company has a current ratio of 67.49, a quick ratio of 67.49 and a debt-to-equity ratio of 31.69. The firm has a 50-day moving average price of $3.65 and a 200-day moving average price of $4.96.

Redwood Trust (NYSE:RWT) last posted its quarterly earnings results on Tuesday, November 3rd. The real estate investment trust reported $0.18 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.21 by ($0.03). The company had revenue of $12.90 million during the quarter, compared to analysts’ expectations of $85.52 million. Redwood Trust had a return on equity of 16.00% and a net margin of 0.42%. Equities analysts anticipate that Redwood Trust will post 0.96 EPS for the current fiscal year.

Redwood Trust Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, September 30th. Stockholders of record on Wednesday, September 23rd were issued a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 22.5%. The ex-dividend date was Wednesday, September 23rd. Redwood Trust’s payout ratio is currently -211.76%.

Insider Buying and Selling at Redwood Trust

In other Redwood Trust news, CFO Brooke Carillo purchased 26,065 shares of the firm’s stock in a transaction on Tuesday, September 15th. The shares were purchased at an average price of $3.85 per share, for a total transaction of $100,350.25. Following the completion of the transaction, the chief financial officer owned 140,481 shares in the company, valued at $540,851.85. This represents a 22.78% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, Director Greg H. Kubicek purchased 50,000 shares of the company’s stock in a transaction on Tuesday, September 15th. The stock was bought at an average cost of $3.85 per share, for a total transaction of $192,500.00. Following the acquisition, the director directly owned 127,185 shares of the company’s stock, valued at $489,662.25. This represents a 64.78% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders have acquired 244,171 shares of company stock valued at $948,402 over the last quarter. Company insiders own 3.30% of the company’s stock.

Hedge Funds Weigh In On Redwood Trust

A number of hedge funds have recently modified their holdings of the stock. Range Financial Group LLC acquired a new position in Redwood Trust during the 3rd quarter valued at $43,000. Optiver Holding B.V. grew its position in Redwood Trust by 2,034.5% in the 1st quarter. Optiver Holding B.V. now owns 10,779 shares of the real estate investment trust’s stock worth $60,000 after purchasing an additional 10,274 shares during the last quarter. Evanson Financial LLC acquired a new stake in Redwood Trust in the 2nd quarter worth $66,000. Abel Hall LLC bought a new position in shares of Redwood Trust during the 3rd quarter worth about $73,000. Finally, Janney Montgomery Scott LLC increased its holdings in shares of Redwood Trust by 18.5% during the 1st quarter. Janney Montgomery Scott LLC now owns 15,113 shares of the real estate investment trust’s stock worth $85,000 after purchasing an additional 2,363 shares during the period. 74.34% of the stock is owned by institutional investors and hedge funds.

Redwood Trust Company Profile

Redwood Trust, Inc is a specialty finance company and real estate investment trust headquartered in Mill Valley, California. Founded in 1994 and traded on the New York Stock Exchange under the symbol RWT, the company focuses on investing in and financing residential real estate credit.

Redwood Trust’s activities include acquiring, originating, securitizing and managing residential mortgage loans and related assets. Its portfolio has historically included jumbo and other non-agency residential mortgages, mortgage-backed securities, mortgage servicing rights and other residential credit investments.