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Thursday, September 28, 2023

Is the Rough Ride Over for Western Asset Mortgage Capital Corporation (WMC)

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Western Asset Mortgage Capital Corporation (WMC) shares are trading at lower $3.51 and the avg recommendation for the stock is Hold, while the current analyst price target stands at $2.00.

To add more color to this target, the company’s high over the last year is $11.33 and the low is $1.37. Over the last 52 weeks, WMC is down -66.44% while the S&P 500 is up 17.22%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, WMC reported a profit of $60.01 million. Western Asset Mortgage Capital Corporation also saw revenues increase to $99.26 million. In addition, WMC has free cash flow of -$155.28 million as of 09-2020. The company’s EBITDA came in at $62.69 million which compares well with its peers.

WMC Return on Equity (ROE) is -243.80%, and its Return on Assets is -20.30%. All told, it is clear that, WMC needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. WMC has a short ratio of 4.11 and outstanding shares of 60.74M.

Company Outlook

WMC has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.11 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -5.60. Investors should also keep an eye on sector updates as WMC has historically followed its peers on positive news.

All told, Western Asset Mortgage Capital Corporation WMC has strung together solid data and demonstrated underlying fundamentals. At its current valuation, WMC represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Western Asset Mortgage Capital Corporation WMC is now commanding a market cap of 196.24M and a float of 60.31M. WMC is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of WMC stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in WMC, either long or short, and we have not been compensated for this article.

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