Redwood Trust, Inc. (RWTQ): fair value, margin of safety and Wheel Score

Is RWTQ undervalued?

Redwood Trust, Inc. (RWTQ) closed at 20.80 on 5 Nov 2026, 274% above the GLS average fair value of 5.56. 5 of the 6 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.

The 6 models disagree widely: GLS Growth gives 0.1080 while DDM gives 27.38. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

RWTQ looks like a fund, note or preferred share rather than an operating company, so the nightly engine files it under Fund / Note: the valuation models are not built for it, and its Wheel Score is capped at 45.

Nine valuation models for RWTQ

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

No Piotroski health score is on file for RWTQ (the statements it needs were not available), so the Health part of the Wheel Score counts it at half marks - 10 of 20 - rather than marking the stock down for missing data. There is no GLS Moat score for RWTQ: funds, notes and second share lines get none, and so does a company with fewer than two years of accounts on file. The Moat part of the Wheel Score is zero.

Returns on capital are thin or negative - ROIC -0.3%, ROE -7.1%, ROA -0.3% - with debt at 22.65 times equity and negative free cash flow. Debt of 22.65 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.

The dividend yield is high at 8.94% (payout ratio 1061%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.

Institutional ownership scores 5/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 11: No options

RWTQ has no listed options in the nightly snapshot, so there is nothing to sell and the stock cannot be wheeled however good the business. It fails the first Wheel Trade Filter (options that actually trade), so the score stays under 70 and is shown as "No options" (11 here). The valuation and quality numbers still apply to owning the shares outright.

Volume runs at 54k shares a day on a market cap of $2.6B, with a beta of 1.54 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score rates that fair.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.

Upcoming events

No upcoming earnings date is recorded for RWTQ in the nightly calendar.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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The 12 companies below are the closest to Redwood Trust, Inc. by market cap within the REIT - Diversified industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

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