The company priced its offering of 13 million shares at $7.59 a share. The offering also includes an option for underwriters to purchase an additional 1,950,000 shares. The offering should close on Monday, April 7.
NYMT plans to use most of the net proceeds from this offering to acquire distressed residential loans and to invest in mezzanine loans to and preferred equity investments in owners of multi-family properties. It could also use some of the net proceeds for other general purposes, such as the repayment of indebtedness.
TheStreet Ratings team rates NEW YORK MORTGAGE TRUST INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEW YORK MORTGAGE TRUST INC (NYMT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NYMT's very impressive revenue growth greatly exceeded the industry average of 6.9%. Since the same quarter one year prior, revenues leaped by 95.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, NEW YORK MORTGAGE TRUST INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- NEW YORK MORTGAGE 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEW YORK MORTGAGE TRUST INC reported lower earnings of $1.11 versus $1.25 in the prior year. For the next year, the market is expecting a contraction of 15.8% in earnings ($0.94 versus $1.11).
- The gross profit margin for NEW YORK MORTGAGE TRUST INC is currently lower than what is desirable, coming in at 28.56%. Regardless of NYMT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NYMT's net profit margin of 23.68% compares favorably to the industry average.
- You can view the full analysis from the report here: NYMT Ratings Report