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Do analysts have more confidence in Lument Finance (USA Stocks:LFT) in September?

September 20, 2023  By Gabriel Shpitalnik
Macroaxis Story
Lument Finance Trust (USA Stocks:LFT), a key player in the Capital Markets service category, has been making waves in the Real Estate industry, specifically in the REIT-Mortgage sector. The company has shown a strong profit margin of 49.27%, with a net interest income of $23.9 million and interest income of $56.7 million. The company's operating income stands at $5.1 million, reflecting a solid financial performance. The company's stock has been analyzed by three analysts, with an estimated target price value of $2.5, slightly above the naive expected forecast value of $2.27. This suggests potential for growth and return on investment. However, investors should note that there are two holds on the stock, indicating a level of uncertainty among some analysts. In terms of risk, Lument Finance Trust shows a beta of 1.1912, indicating a higher volatility compared to the market. The downside deviation is 1.71, with a maximum drawdown of 9.66. However, the company's risk adjusted performance is positive at 0.1164, with a market risk adjusted performance of 0.9556, suggesting that the company has been managing risks effectively. The company's return on equity is 0.0489, with a revenue per share of $0.462. The short ratio is 1.26, with 55.5K shares short. The 200-day moving average is 1.981, indicating a stable performance over the past several months. Overall, Lument Finance Trust presents a promising investment opportunity for those looking to maximize their returns in the real estate sector. However, as with any investment, potential investors should carefully consider the company's performance, risk factors, and analyst consensus before making a decision. The upcoming fiscal quarter is projected to conclude on September 30, 2023. As many of us are growing increasingly interested in the capital markets sector, we will evaluate the viability of investing in Lument Finance Trust. We will delve into why investors might still consider acquiring a stake in this business, given the latest economic forecast.
Published over a year ago
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Reviewed by Vlad Skutelnik

This company, Lument Finance Trust, carries a substantial debt of $876.28 million. It has a debt-to-equity (D/E) ratio of 3.53, indicating that Lument Finance heavily depends on borrowed funds for its operations.

Detailed assessment

Investing in Lument Finance Trust (USA Stocks:LFT) is an opportunity to maximize your returns, particularly if you're seeking exposure to the REIT-Mortgage industry. The company's return on assets stands at a modest 1.06%, indicating a level of profitability. The firm's stock is currently trading around $2.24, just above its 200-day moving average of $1.98 and 50-day moving average of $2.05, suggesting an upward trend. The company's forward dividend rate is $0.24, providing a potential income stream for investors. Despite a 1.9 standard deviation indicating some volatility, the company's Sortino ratio of 0.22 and Treynor ratio of 0.95 suggest a reasonable risk-adjusted performance. The company has reported a net income from continuing operations of $9.6M, and a net income applicable to common shares of $5.1M, demonstrating its ability to generate profits.
What is the right price you would pay to acquire a share of Lument Finance? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Lument Finance Trust this year

Annual and quarterly reports issued by Lument Finance Trust are formal financial statements that are published yearly and quarterly and sent to Lument stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934.
Companies such as Lument Finance often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How important is Lument Finance's Liquidity

Lument Finance financial leverage refers to using borrowed capital as a funding source to finance Lument Finance Trust ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Lument Finance financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Lument Finance's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Lument Finance's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Lument Finance's total debt and its cash.

Lument Finance Gross Profit

Lument Finance Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Lument Finance previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Lument Finance Gross Profit growth over the last 10 years. Please check Lument Finance's gross profit and other fundamental indicators for more details.

Is Lument a risky opportunity?

Let's check the volatility. Lument is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Lument (USA Stocks:LFT) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. acquiring a share of a Lument Finance stock makes you a part-owner of that company.

Lument Finance Trust Current Consensus

Here is the newest trade recommendation based on an ongoing consensus estimate among financial analysis covering Lument Finance Trust. The Lument consensus assessment is calculated by taking the average estimates from all of the analysts covering Lument Finance
Strong Buy
1		Buy
1		Hold
2
Strong Buy125.0
Buy125.0
Hold250.0
Sell00.0
Strong Sell00.0
Lument Finance Trust (USA Stocks:LFT), an REIT-Mortgage industry player, is currently trading at a typical day price of $2.26, nearing its 52-week high of $2.32. The company's net asset stands at a robust $1.13 billion, supported by a strong current ratio of 153.71X, demonstrating its ability to meet short-term obligations. With a forward dividend rate of $0.24, Lument provides an attractive yield of 0.11% to income-focused investors. Lument's operating margin is 0.49%, and it has reported a net interest income of $23.9 million. The company's Price to Book ratio is 0.52X, suggesting that it may be undervalued. Over the past five years, Lument has delivered a return of 10.99%, indicating its potential for steady long-term growth. The company's total debt is $876.28 million, which is manageable given its substantial total assets. Although the short percent is 0.0018, indicating some investors are betting against the stock, the shares owned by institutions is 46.25%, demonstrating confidence from large-scale investors. Based on these factors, Lument Finance Trust presents a favorable investment opportunity for those seeking to maximize returns.

Is Lument showing indication of lower volatility?

The latest Treynor ratio for Lument Finance Trust, standing at 0.95, could be interpreted as an indication of lower volatility. The Treynor ratio, a risk-adjusted measure of return, suggests that Lument is successfully generating substantial returns relative to the systematic risk it is exposed to. A higher ratio typically indicates that a company is effectively navigating market volatility, thus providing a more stable investment. Therefore, this recent figure may suggest that Lument is a potentially safer investment for those seeking lower risk. Lument Finance Trust exhibits relatively low volatility, with a skewness of 0.22 and a kurtosis of 0.1. However, we recommend all investors to independently investigate Lument Finance Trust to ensure all available information aligns with their expectations about its upside potential and future expected returns. Understanding different market volatility trends often assists investors in timing the market. Proper use of volatility indicators allows traders to measure the risk of Lument Finance's stock against market volatility during both bullish and bearish trends. The heightened level of volatility that accompanies bear markets can directly impact Lument Finance's stock price, adding stress to investors as they watch the value of their shares plummet.
This typically compels investors to rebalance their portfolios by purchasing different stocks as prices fall. In conclusion, Lument Finance Trust (LFT) has shown a robust performance and has potential for further growth. With a current market valuation of 2.24 and a real value of 2.52, the stock appears to be undervalued. Analysts' consensus leans towards a 'Hold' with one strong buy recommendation, indicating a mixed sentiment. The highest estimated target price stands at 2.75, suggesting a possible upside. However, investors should also consider the possible downside price of 0.31. With the fiscal year ending in December, it will be interesting to see if LFT continues its upward trajectory in October. As always, investors are advised to conduct their own thorough research before making any investment decisions. .

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Editorial Staff

Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Lument Finance Trust. Please refer to our Terms of Use for any information regarding our disclosure principles.

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