Ares Commercial Real Estate (ACRE) Shares Soar 3.25% on Financial Stability

Ares Commercial Real Estate (ACRE) shares surged 3.25% intraday, reaching their highest level since February 2025, marking a fourth consecutive day of gains with a total increase of 4.05% over the past four days.

The strategy of buying ACRE shares after they reached a recent high and holding for 1 week showed poor performance over the past 5 years. The annualized return was -4.95%, significantly underperforming the market. This indicates that waiting for a recent high and holding for a short duration does not yield favorable returns for this stock.

ACRE has taken significant steps to stabilize its financial position. The company reported no new loan losses in the first quarter and achieved positive distributable profits, signaling a potential turnaround. This financial stability has likely contributed to the recent positive market sentiment surrounding the stock.

In addition to stabilizing its loan portfolio, ACRE has made strategic adjustments to its asset allocation. The company has reduced its exposure to office loans by 25% year-over-year and decreased non-performing loans by 34%. These moves indicate a shift towards lower-risk assets, which could further bolster investor confidence and support the stock's upward trajectory.

The options market is also reflecting heightened expectations for ACRE. The August 15, 2025, $10.00 Call option shows high implied volatility, suggesting that investors anticipate significant future movements in the stock price. This could be due to upcoming events or developments that may drive the stock higher or lower.