Adamas Trust Inc. 9.125% Senior Notes Due 2030 (ADAMG)

FairStock Score: 39/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with the business. Adamas Trust owns and manages mortgage-related residential assets. That is a cyclical, capital-intensive field, and I see no evidence of a durable competitive moat; success depends on funding costs, credit, and interest rates. The filed numbers show a genuine turnaround. In FY2025, ended 2025-12-31, net income was $149.0M and diluted EPS $1.10, versus a FY2024 net loss of $62.0M, diluted EPS negative $1.14, and FY2023 net loss of $48.7M, diluted EPS negative $0.99. More recently, fiscal Q2 2026, the quarter ended 2026-06-30, produced net income of $55.2M and diluted EPS $0.47; fiscal Q1 2026, the quarter ended 2026-03-31, $48.6M and $0.40; and fiscal Q3 2025, the quarter ended 2025-09-30, $44.8M and $0.36. That compares with fiscal Q2 2025, the quarter ended 2025-06-30, net income of $8.5M and diluted EPS negative $0.04. The computed Lynch category is TURNAROUND, and the filings support that. Still, the balance sheet is the key. FairStock calculates debt-to-equity at 7.69, and return on capital employed at only 2.00%, even though return on equity is 16.44%. That tells me equity returns are heavily borrowed. The FairStock P/B of 2.34 at the 2026-10-13 close is not a bargain if earnings prove cyclical. The notes carry a 9.125% coupon and trade at $24.22, near the low end of a $24.01-$25.47 52-week range; FairStock gives a 39/100 score. Growth is real, but the margin of safety is thin for a leveraged mortgage investor. I would want several more quarters of consistent profit and lower leverage before calling it safe.

In plain English: Adamas Trust invests in and manages home-mortgage-related assets. The company lost money in 2023 and 2024 but made a profit in 2025 and in recent quarters, so the business looks improving but still risky because it uses a lot of borrowed money. The 9.125% notes due 2030 last traded at $24.22, close to the bottom of their past-year range of $24.01 to $25.47, so the price does not look expensive based on that range, but the company’s numbers show high borrowing.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer