Long-term shareholders of Blackstone Mortgage Trust, Inc. (NYSE: BXMT) may have second thoughts about holding onto their investment, given the stock’s decline of 44% over the past five years. However, recent short-term gains of 9.3% in about a month and 3.6% in the past week show some positive momentum.
Warren Buffett’s insights in “The Superinvestors of Graham-and-Doddsville” remind us that stock prices don’t always reflect a company’s true value. One way to gauge market sentiment is by comparing earnings per share (EPS) changes with share price movements. Despite a staggering annual EPS drop of 59% over the past five years, the stock’s price decline of 11% per year has been less severe. This muted reaction suggests that the market may anticipate a potential turnaround, supported by a high P/E ratio of 698.75, indicating investor optimism about future earnings growth.
It’s noteworthy that the CEO’s compensation at Blackstone Mortgage Trust is relatively modest compared to peers, but the crucial question remains whether the company can restore earnings growth moving forward.
Considering dividends, which are also critical for total shareholder return (TSR), Blackstone Mortgage Trust has recorded a TSR of -8.3% over the last five years. This figure encompasses dividends and other factors like capital raisings and spin-offs, providing a more holistic view of shareholder returns.
In conclusion, while recent gains offer a glimmer of hope, long-term investors must weigh the company’s earnings prospects and broader market conditions carefully when deciding on their investment strategy.
