Angel Oak Mortgage REIT (NYSE:AOMR) Announces Earnings Results

Angel Oak Mortgage REIT (NYSE:AOMR) announced its quarterly earnings results on Tuesday. The company reported $0.35 EPS for the quarter, beating analysts’ consensus estimates of $0.33 by $0.02, Zacks reports. Angel Oak Mortgage REIT had a net margin of 10.64% and a return on equity of 5.25%.

Here are the key takeaways from Angel Oak Mortgage REIT’s conference call:

• Distributable earnings rose to $9.0 million from $2.6 million a year ago, while net interest income increased 8% year over year to $10.7 million and interest income grew 18% to $41.4 million.
• Management repurchased $15 million of common equity at accretive return levels and negotiated a 35-basis-point reduction in the spread on its largest warehouse facility, actions expected to improve future returns.
• Following two post-quarter securitizations, recourse debt-to-equity declined from 2.3 times to approximately 1.0 times, while the company retained about $900 million of undrawn financing capacity and plans to maintain roughly four non-QM securitizations annually.
• GAAP book value per share fell 1.7% to $10.13, primarily due to unrealized portfolio and derivative losses, although economic book value declined only 0.3% and management said book value has remained relatively flat since quarter-end; the company declared a $0.32 per-share dividend.
• Angel Oak plans to keep HELOCs as a selective 10%–15% allocation of the portfolio, citing attractive returns but emphasizing cautious underwriting amid weaker broader consumer credit and potential increases in prepayment speeds as mortgage rates decline.

Angel Oak Mortgage REIT Stock Up 0.8%

Shares of NYSE AOMR traded up $0.07 during trading on Tuesday, hitting $8.85. The stock had a trading volume of 39,165 shares, compared to its average volume of 106,220. The firm has a fifty day moving average of $8.70 and a two-hundred day moving average of $8.70. The company has a market capitalization of $220.49 million, a PE ratio of 13.83 and a beta of 1.25. The company has a debt-to-equity ratio of 8.44, a current ratio of 13.09 and a quick ratio of 13.09. Angel Oak Mortgage REIT has a 12 month low of $7.95 and a 12 month high of $10.14.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in AOMR. Strs Ohio purchased a new position in Angel Oak Mortgage REIT during the first quarter worth about $25,000. Kemnay Advisory Services Inc. purchased a new stake in Angel Oak Mortgage REIT in the 4th quarter valued at about $26,000. BNP Paribas Financial Markets lifted its position in shares of Angel Oak Mortgage REIT by 343.0% during the 2nd quarter. BNP Paribas Financial Markets now owns 3,929 shares of the company’s stock worth $37,000 after buying an additional 3,042 shares in the last quarter. Marshall Wace LLP bought a new position in shares of Angel Oak Mortgage REIT during the 4th quarter worth approximately $87,000. Finally, Public Employees Retirement System of Ohio purchased a new position in shares of Angel Oak Mortgage REIT in the 3rd quarter worth approximately $88,000. 80.15% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Ratings Changes

A number of research analysts have recently issued reports on the stock. BTIG Research reduced their price objective on shares of Angel Oak Mortgage REIT from $13.50 to $10.00 and set a “buy” rating for the company in a report on Wednesday, June 17th. Weiss Ratings cut shares of Angel Oak Mortgage REIT from a “hold (c)” rating to a “sell (d+)” rating in a research report on Friday, May 15th. Two research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus price target of $10.08.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc (NYSE: AOMR) is a real estate investment trust that specializes in a diversified portfolio of residential mortgage assets. The company primarily invests in non-agency residential mortgage-backed securities (RMBS), residential whole loans and credit risk transfer securities issued by government-sponsored enterprises. By focusing on these structured credit instruments, Angel Oak Mortgage REIT seeks to generate attractive risk-adjusted returns through a combination of net interest income and potential capital appreciation.

The firm employs leverage through repurchase financing facilities and actively manages duration and credit exposure to adapt to changing market conditions.