NEW YORK (TheStreet) -- Starwood Property Trust (STWD - Get Report) was falling 3%to $22.50 Tuesday after the company announced the pricing of its 22 million share public offering.

The mortgage real estate investment trust priced the 22 million shares of common stock for gross proceeds of about $496.1 million, or about $570.5 million if the underwriters fully exercise the option to buy additional stock. The underwriters have a 30-day option to purchase up to 3.3 million additional shares.

Starwood Property Trust will use the proceeds of the offering to "originate and purchase additional commercial mortgage loans and other target assets and investments" according to the company's press release. The proceeds may also be used for general corporate purposes.

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TheStreet Ratings team rates STARWOOD PROPERTY TRUST INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate STARWOOD PROPERTY TRUST INC (STWD) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • STWD's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 110.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • STARWOOD PROPERTY TRUST INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, STARWOOD PROPERTY TRUST INC increased its bottom line by earning $1.82 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $1.82).
  • 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 68.6% when compared to the same quarter one year prior, rising from $56.33 million to $94.97 million.
  • Net operating cash flow has significantly increased by 1662.19% to $601.46 million when compared to the same quarter last year. In addition, STARWOOD PROPERTY TRUST INC has also vastly surpassed the industry average cash flow growth rate of 11.12%.
  • 45.34% is the gross profit margin for STARWOOD PROPERTY TRUST INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, STWD's net profit margin of 49.97% significantly outperformed against the industry.
  • You can view the full analysis from the report here: STWD Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.