Finding secular ideas within the financial sector has been difficult in the last several years given the onslaught of regulation reducing returns on equity, the slow macroeconomic growth stifling loan demand, excessive litigation and a deleveraging consumer. There has been significant thought put into figuring out which banks will benefit and which will struggle. A new theme within the industry is to find plays that offer significant upside potential by focusing on the transfer of servicing mortgage activity away from the mega-banks to third party outsourcers.
Walter Investment Corp. (WAC) is one of the few publicly traded companies whose focus is mortgage servicing. The industry is very much in its infancy with the large banks just starting to...
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