Rithm Capital Corp. (NYSE:RITM) closed at $8.50 on October 13. The stock has returned -17.5% over the last six months, compared to a 21.5% return for the Insider Monkey Billionaire Index and 14.0% for the State Street SPDR S&P 500 ETF Trust.
Rithm Capital calls itself a global asset manager rather than a mortgage company. Through Newrez, it writes mortgages and collects the payments afterwards. It also lends to property developers and manages money for outside investors through Sculptor. Mortgages remain the core without being the whole of it.
That spread is unusual here, and it shapes how the stock is priced. Running operating businesses means staff, systems and overheads. The pure mortgage trusts carry almost none of that, which is what makes any comparison between them awkward.
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The Cheapest Assets in the Sector:
Price-to-book is 0.76. No other mortgage company in our list is priced that far below the stated value of what it holds. You are buying the portfolio at roughly three-quarters of its carrying value.
The argument that this is steadier than it looks rests on the structure. When lending dries up, the servicing business keeps collecting. When lending picks up, the origination business should catch the rebound. One side is meant to cover for the other.
Very few companies in our 10 Best Mortgage Finance Stocks To Buy According to Billionaires run a mortgage business and hold a mortgage portfolio at the same time. To see the full ranking, click HERE.
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The Discount Has Earned Itself:
Quarterly earnings fell 81.9% against a year earlier. A drop that size gives investors reason to doubt the stated value of the assets, and a discount to book is what that doubt tends to look like.
Operating margin is 7.94%. The pure mortgage trusts in this sector keep more than nine tenths of their revenue, largely because they have almost no costs. Rithm keeps a small fraction of its revenue, because it runs an actual business with people in it. A thin margin also leaves less room for error when volumes fall.
Debt stands at 387.64% of equity. That is far below the agency trusts, but Rithm’s assets are more varied and harder to value than government-backed bonds. Leverage against assets nobody can price quickly is a different kind of risk.
Two Multiples Telling Different Stories:
The stock trades at 15.70 times what it earned over the past year and 4.06 times what analysts expect next year. That gap suggests the market is treating the recent drop in profit as a one-off. Forecasts are doing more of the work here than results are.
The discount to book and the low forward multiple look like two separate reasons to buy. They lean on one shared assumption, which is that the recent drop in profit says nothing lasting about what the assets are worth. If that assumption is wrong, the stock is not cheap at all.
Conclusion:
Rithm is the cheapest company in mortgage finance measured against its own assets, and the last set of results is a large part of why. The spread of businesses should make it steadier than a pure lender or a pure trust. That is the theory, and the recent numbers have not yet supported it. Anyone buying the discount is really buying the forecast behind it, and that is worth being honest about before putting money in.
Market Sentiment:
Rithm Capital Corp. was held by 24 hedge funds with a combined stake value of about $130 million at the end of Q2 2026 in the Insider Monkey database. This is down from 31 hedge fund holders with a cumulative investment value of around $210 million in the previous quarter.
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This article is originally published at Insider Monkey.
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