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RAIT Financial Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of real estate investment trust RAIT Financial Trust (NYSE: RAS  ) continued to slide after a disappointing earnings announcement late last week. Shares were down more than 11% in intraday trading today.

So what: There were some hopeful signs for RAIT in its earnings release -- GAAP net income was positive and total debt declined, for instance. However, the results also provided plenty for investors to have indigestion over. Non-accrual loans were up, total revenue continued to decline, and operating income stayed stuck in the red.

Now what: Investors typically flock to REITs for their dividends -- something that has been conspicuously absent for RAIT since 2008. However, on the basis of certain financial multiples, RAIT looks like it's been beaten down to an absolute bloody pulp, which makes it an interesting pick for traders who enjoy volatility and the thrill of a long shot. For my money, though, the company's rocky results and opaque operations make this a stock to skip.

Interested in more info on RAIT Financial? Add it to your watchlist here by clicking here.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.

Read/Post Comments (3) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 25, 2010, at 5:15 PM, jsphilb wrote:

    The Fools sure changed their tune on this stock. On 10/19 you said this was a good stock to "Double Down on these Home Run Hopefuls". "The fundamentals seem to be improving at this REIT, so a double-down may not be such a bad idea." The stock is down 26.3% in the 6 days since that article was posted.

    Check out Motley's Foolishness here: I'd suggest ignoring these poorly researched articles in the future

  • Report this Comment On October 25, 2010, at 6:43 PM, TMFKopp wrote:


    "On 10/19 you said this was a good stock ..."

    Check back on that link you posted. There is a different author on that article.


  • Report this Comment On November 02, 2010, at 12:47 AM, atdowney2 wrote:

    I hold the pfd-A/C- they pay, FCH doesn't +pps/higher- own that pfd too

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