GPMT

Granite Point Mortgage Trust ($GPMT): Insiders Buy $500K+ Consecutively, 7.33% Dividend Yield Sweetens Deal

11/12/2025 22:12

Granite Point Mortgage Trust ($GPMT) is a mortgage REIT specializing in commercial real estate mortgage loans, with a market capitalization of $132.2 million. The company focuses primarily on intermediate-term bridge financing for property acquisitions, recapitalizations, and refinancing, with floating-rate senior loans comprising 97% of its portfolio - a structure that could benefit from rising interest rate environments. The key signal investors should note is the consistent insider buying pattern that emerged in 2025. After two directors sold a combined $100,000 worth of shares in June 2024, the sentiment completely reversed starting February 2025. Director Patrick Halter made two significant purchases totaling $164,000 in February and May, with the May purchase of 29,000 shares at $2.38 demonstrating considerable confidence in the company's prospects. Even more intriguing is Director Lazar Nikolic's persistent buying behavior. He has been adding shares almost monthly from February through November, with his latest November purchases of 16,236 shares totaling $314,000 at prices of $19.31-$19.34. This is particularly noteworthy given current share prices below $3, suggesting these transactions likely involved convertible securities or warrants rather than common stock. President John Taylor also demonstrated management confidence with a $95,760 purchase of 42,000 shares in May. This collective insider buying throughout 2025 starkly contrasts with the selling pattern of 2024. The stock price movement validates the insiders' judgment to some extent. $GPMT started around $2.95 in June 2024, declined to $2.50 in early August, then rallied to $3.32 in November. After a correction to $2.68 by year-end, the stock plunged to $1.57 in April 2025, showing extreme volatility. However, recent September trading around $2.95-$3.01 demonstrates significant recovery resilience. Financially, challenges remain significant. Trailing twelve-month net loss reached $70.58 million, with a high debt-to-equity ratio of 205.20%. However, the company maintains $80.1 million in cash for adequate liquidity, and the 7.33% dividend yield remains attractive. Importantly, distributable earnings before realized gains/losses have turned positive, suggesting core operating performance is stabilizing. Considering the current market environment, $GPMT's investment appeal is complex. With the ongoing U.S. government shutdown and declining consumer confidence affecting small-cap stocks broadly, the operating environment remains challenging. However, as a mortgage REIT with a floating-rate portfolio, there's potential upside from future monetary policy changes. In an optimistic scenario, the persistent insider buying reflects confidence in fundamental value recovery. The president's substantial purchase particularly suggests expectations of improved performance or special catalysts. If the commercial real estate market has bottomed, $GPMT's senior loan focus could position it as a relatively safe recovery play. However, significant risks warrant caution. The high leverage structure could severely impact shareholder value if credit losses expand, while persistent losses raise questions about dividend sustainability. Structural changes in commercial real estate markets could delay recovery longer than anticipated. Key investment criteria are clear: positive signals include continued improvement in distributable earnings excluding realized gains/losses, better new loan terms, and sustained insider buying. Warning signs to watch include rapid increases in CECL reserves, deteriorating loan portfolio quality, and any return to insider selling patterns. Overall, $GPMT presents both high risk and substantial recovery potential. While the confident insider buying is clearly positive, ongoing losses and high volatility demand careful consideration. For investors seeking high yields while betting on commercial real estate recovery, this could be a worthwhile consideration.