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Rising rates pressure Adamas Trust's income and valuation, with mixed outlook on mortgage portfolio and preferred shares.

Analyst Insights
30 Sep 2026
Seeking Alpha
View Source
Bearish
Rising rates pressure Adamas Trust's income and valuation, with mixed outlook on mortgage portfolio and preferred shares.

Adamas Trust faces challenges from rising interest rates, which could reduce its net interest income and book value. Its leveraged agency mortgage portfolio is vulnerable if spreads widen, but growing business-purpose rental loans with a 7.00% average coupon provide some offset. The stock trades below its historical price-to-book ratio but is less attractive compared to mortgage REIT peers. Additionally, the Series F preferred shares will start floating in October 2026, offering coupons linked to short-term rates, which is beneficial in a rising rate environment. Overall, the outlook is cautious due to the stock's downtrend and potential risks in its portfolio.

Adamas Trust market context shows mixed Financials-sector performance on Pluang. As of Sep 30, 2026 19:15 WIB, 40 of 85 priced US Financial stocks rose, 34 fell. Notable movers include OXLC at USD 9.09 with 0% Sell / 100% Buy order activity, BBVA at USD 28.44 down 0.70%, and HSBC at USD 100.10 down 0.62%. Typical hold times range from 37 to 81 days among these stocks.

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