Redwood Trust (NYSE:RWT) invests in mortgage-related and other real estate-related assets, and is engaged in residential and commercial mortgage banking activities. Redwood recently took meaningful steps to right- size its cost and business structure in light of market conditions. After a successful repositioning of the company’s mortgage-banking business and associated expense infrastructure, Redwood’s leaner and more nimble platform is well positioned to execute longer-term strategic initiatives intended to enhance growth opportunities and future earnings power. We believe Redwood Trust remains competitively advantaged as a residential mortgage credit investor and is well positioned to benefit from potential government-sponsored enterprise (GSE) reform and the eventual revitalization of private-label residential securitization. Trading under book value and generating a dividend yield of nearly 8%, the stock continues to represent a compelling investment value.
- From Weitz Balanced Fund third quarter 2016 commentary.
