Redwood Trust Inc. Stock Upgraded (RWT)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Redwood (NYSE: RWT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 4700.00% and other important driving factors, this stock has surged by 41.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 2984.0% when compared to the same quarter one year prior, rising from $1.30 million to $40.00 million.
  • REDWOOD TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REDWOOD TRUST INC reported lower earnings of $0.31 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus $0.31).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, REDWOOD TRUST INC's return on equity is below that of both the industry average and the S&P 500.
.

Redwood Trust, Inc., a real estate investment trust (REIT), together with its subsidiaries, engages in investing, financing, and managing real estate assets. The company has a P/E ratio of 26.9, above the S&P 500 P/E ratio of 17.7. Redwood has a market cap of $1.24 billion and is part of the financial sector and real estate industry. Shares are up 53.1% year to date as of the close of trading on Friday.

You can view the full Redwood Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!.
null

If you liked this article you might like

Avoid the 'REIT Rout' -- These 5 REITs Are Breaking Out Now

3 Hold-Rated Dividend Stocks: EFC, RWT, HTGC

What To Hold: 3 Hold-Rated Dividend Stocks ABDC, RWT, MMLP

What To Hold: 3 Hold-Rated Dividend Stocks CPLP, AINV, RWT

3 Hold-Rated Dividend Stocks: NSH, WHF, RWT