New York Mortgage Trust Shares Soar 2.86% on Earnings Beat

New York Mortgage Trust (NYMT) shares surged 2.86% today, marking the fourth consecutive day of gains and a 10.45% increase over the past four days. The stock price reached its highest level since April 2024, with an intraday gain of 2.86%.

The strategy of buying NYMT shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and sharp decline in the first year. However, it recovered and performed well in the subsequent years, driven by NYMT's strategic investments and favorable market conditions.

Initial Performance: Following NYMT's recent high, the stock experienced a significant drop, with a maximum drawdown of 38.57% in the first year. This was due to broader market volatility and the impact of economic indicators, such as the Federal Reserve's rate cuts and the FHFA and GSE reforms, which affected the mortgage market.

Recovery and Performance: After the initial decline, NYMT's stock price recovered and exhibited strong performance. The 1-week holding period proved advantageous as NYMT's strategic investments in Agency RMBS and short-duration credit assets in the BPL sector started to yield results. The company's enhanced liquidity and excess liquidity increased by nearly 20% from the previous quarter, indicating improved financial health and operational efficiency.

Strategic Investments: NYMT's investment in AlphaFlow, a technology platform for institutional investment in real estate debt, underscored its strategic focus on leveraging technology to enhance efficiencies in the real estate credit markets. This move was part of a broader strategy to optimize the expected return and EAD contribution of the agency portfolio while maintaining a healthier convexity profile.

Market Conditions: The company capitalized on market dislocation, acquiring $1.5 billion in Agency RMBS and $397 million in whole loans, with a focus on bridge and rental loans. The historically wide spreads and attractive return potential in the Agency RMBS market supported NYMT's growth and dividend sustainability.

In conclusion, while the strategy faced challenges in the initial months, the long-term performance was bolstered by NYMT's strategic investments and favorable market conditions. The 1-week holding period after NYMT's recent high proved to be a prudent decision, allowing investors to capture the recovery and benefit from the company's strategic initiatives.

New York Mortgage Trust's stock price has been influenced by several key factors. The company reported its quarterly earnings on April 30th, 2025, with an EPS of $0.20, which exceeded the consensus estimate of $0.10. This positive earnings result has likely contributed to the stock's upward momentum.

Analysts have also shown optimism towards NYMT. StockNews.com upgraded the stock from a “sell” to a “hold” rating, while B. Riley increased their price target from $8.00 to $9.00 with a “buy” rating. These upgrades reflect a positive sentiment and potential for further stock price appreciation.

Institutional investors have been increasing their positions in NYMT, indicating confidence in the stock’s future performance. Major investors such as Price T Rowe Associates Inc. MD and Tower Research Capital LLC TRC have made significant investments, further bolstering market confidence.

Additionally, NYMT announced a quarterly dividend of $0.20, offering a strong dividend yield of 11.70%. This attractive yield can attract income-focused investors, positively impacting the stock price. Overall, the combination of positive earnings, analyst upgrades, increased institutional investment, and a strong dividend yield has driven the recent stock price movement of New York Mortgage Trust.