Here’s Why ClearBridge Investments Added Redwood Trust (RWT) to its Portfolio

ClearBridge Investments, an investment management company, published its “ClearBridge Small Cap Value Strategy” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter, the strategy outperformed the Russell 2000 Value Index benchmark. Consumer staples and utility sectors contributed positively to the fund’s performance while the financials and industrial sectors were the main performance detractors. On an absolute basis, the fund faced losses in all the 11 sectors it invested in. You can check the top 5 holdings of the fund to know its best picks in 2022.

In the letter, ClearBridge Investments discussed stocks like Redwood Trust, Inc. (NYSE:RWT). Headquartered in Mill Valley, California., Redwood Trust, Inc. (NYSE:RWT) is a US-based specialty financial services company. On August 19, 2022, Redwood Trust, Inc. (NYSE:RWT) stock closed at $8.22 per share. One-month return of Redwood Trust, Inc. (NYSE:RWT) was -0.96%, and its shares lost 33.33% of their value over the last 52 weeks. Redwood Trust, Inc. (NYSE:RWT) has a market capitalization of $959.817 million

Here’s how ClearBridge Investments mentioned Redwood Trust, Inc. (NYSE:RWT) in the Q2, 2022 investor letter:

“We took advantage of the selloff in the financials sector to add a new position in Redwood Trust, Inc. (NYSE:RWT). The company operates as a specialty finance company within the residential mortgage banking and business purpose mortgage banking industries and capitalized as large investment banks shed their mortgage securitization businesses after the 2008 Great Financial Crisis (GFC). Redwood has since expanded to become the industry leader in distribution of loans through whole loan sales.

Additionally, its investment portfolio has been very strong historically, even in the GFC, and its expansion into banking has made it better. We believe that the company’s long-term value creation is substantially underrepresented in its current market price and look forward to it being a high-quality long-term compounder within the portfolio.”

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Although ClearBridge Investments invested in Redwood Trust, Inc. (NYSE:RWT), it is not on the list of 30 Most Popular Stocks Among Hedge Funds. At the end of the first quarter, Redwood Trust, Inc. (NYSE:RWT) was held by 14 hedge funds compared to 16 in the previous quarter.

We discussed Redwood Trust, Inc. (NYSE:RWT)  in another article and shared dividend stock picks of billionaire Mario Gabelli. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.

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