New Residential Investment Corp.NYSE
Fri, Dec. 2, 7:31 AM
- The risk/reward on AGNC Investment (NASDAQ:AGNC) is no longer compelling at current levels," says Douglas Harter, downgrading to Neutral from Outperform, and cutting the price target to $19.50 from $21 (last night's close $18.09).
- He expects a whopping 7.8% decline in book value through November (to be announced on Dec. 12). This comes against his forecast of a 2.6% decrease in book value for the sector (NYSEARCA:REM) as a whole, and flat economic return (defined as the change in book value plus the dividend) for Q4.
- As far as AGNC's relative valuation at the moment, it trades for 91% of tangible book vs. just 84% for fellow sector giant Annaly Capital (NYSE:NLY). The sector as a whole trades at 91% of book. He's also cutting Annaly's PT to $11 from $11.50, along with CYS Investment (NYSE:CYS) to $8.50 from $9. Chimera Investment (NYSE:CIM), however, gets its PT boosted to $17 from $15.50 to reflect strong incremental returns.
- Harter and team's top picks remain those names with less exposure to interest rate risk, better historical track records, and lower book value volatility: Two Harbors (NYSE:TWO), New Residential (NYSE:NRZ), PennyMac (NYSE:PMT), and Starwood (NYSE:STWD).
Thu, Nov. 17, 12:14 PM
Wed, Nov. 16, 8:44 AM
- Under the deal, New Residential (NYSE:NRZ) purchased MSRs with UPB of about $10B from Walter Investment's (NYSEMKT:WAC) Walter Capital Opportunity. The loans are subserviced by Walter's Ditech Financial.
- Related to that sale, New Residential is expected to acquire from Ditech MSRs with a UPB of roughly $24B. In total, the deals are expected to generate about $90M in near-term cash proceeds for Walter.
- Previous coverage
Mon, Nov. 14, 12:47 PM
- While most residential mortgage REITs don't own floating-rate securities - and thus may see little benefit from higher rates - that's not true for commercial mREITs, says analyst Paul Miller.
- Among his post-election favorites are Arlington Asset (AI +2.6%) and New Residential (NRZ +0.2%).
- For AI, Miller and team says book value should be boosted in a rising rate environment as management already has hedges in place.
- For New Residential, MSRs become more valuable as rate rise (slower refinances). Miller sees book gaining 3.8% should interest rates increase 50 basis points. In addition, the company's portfolio of agency and non-agency RMBS paper are both well-protected in a rising rate scenario.
Wed, Nov. 2, 7:24 AM
- Q3 core earnings of $123.9M or $0.51 per share vs. $119.6M and $0.52 earned in Q2. Float increased to about 250M shares from 230M as company raised money for deals, including the purchase of $66B UPB of MSRs from Walter Investment. Dividend is $0.46 per share.
- Conference call is at 8 ET.
- Previously: New Residential Investment beats by $0.02 (Nov. 2)
- NRZ flat premarket
Wed, Nov. 2, 6:37 AM
Tue, Nov. 1, 5:30 PM
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Mon, Oct. 17, 2:36 PM
- "After 18 months of intense corporate challenges caused by their prior rapid growth, regulatory fines and sanctions, and spillover from what I consider bad behavior from a conflicted lobby group, Ocwen (NYSE:OCN) has now turned the corner and is on road profitability," writes John Devaney updating his bull thesis on the company in a sizable report, which also touches on other industry participants like ASPS, NRZ, NSM, WAC, and PHH.
- "The past four months have seen a series of meaningful events that have greatly de-risked the company and added credibility to the management and the company’s reputation."
- The stock represents deep value, says Devaney, noting tangible book value north of $10 per share, a stock price of just $3.60, and possibly $1 per share in earnings next year. He's got a price target of $6.75 by year-end 2017.
Fri, Sep. 23, 4:41 PM
Wed, Sep. 21, 11:20 AM
- The SEC just charged Leon Cooperman with insider trading over Atlas Pipeline Partners, and Omega holdings such as Alitsource Portofolio, Navient, Aercap, and Tribune Media have knee-jerked sharply lower.
- A check of other top Omega holdings: First Data (FDC -1.3%), Allergan (AGN -0.9%), AIG (AIG +0.4%), Walgreens (WBA -0.6%), Dow Chemical (DOW), United Continental (UAL -0.7%), Ashland (ASH +0.3%), Chimera Investment (CIM -0.4%), Motorola (MSI +0.1%), HRG Group (HRG -1%), Microsoft (MSFT +1%), E*Trade (ETFC), New Residential (NRZ -1%), OneMain Holdings (OMF -2.3%), PVH (PVH +0.4%), UnitedHealth (UNH +0.7%), MGM Resorts (MGM -0.5%), New Media (NEWM -1.9%), Dish Network (DISH +0.5%), Synchrony Financial (SYF +1%), Eastman Chemical (EMN +0.3%).
- Previously: Cooperman holdings head south after insider trading charge (Sept. 21)
- Previously: Leon Cooperman charged with insider trading (Sept. 21)
Thu, Aug. 11, 7:10 AM
Wed, Aug. 10, 4:30 PM
Tue, Aug. 9, 4:18 PM
- Ocwen Financial's (OCN +15.2%) servicer rating is boosted back to Average from Below Average at S&P.
- The long-hoped-for (at least by Ocwen bulls) move eliminates a major overhang - the idea that NRZ might transfer servicing from Ocwen - from the stock price. The action would also seemingly be a key step in allowing Ocwen to return to growth by re-entering the market for MSR acquisitions.
- The stock jumped 15% to $2.66 in the last minutes of the regular session, and is changing hands for $2.73 after hours.
- ASPS +2.5%
Tue, Aug. 9, 7:10 AM
- New Residential (NYSE:NRZ) agrees to buy about $35B UPB of seasoned conventional mortgage servicing rights from Walter Investment (NYSE:WAC) for roughly $231M. In addition, NRZ has an agreement in principal to purchase substantially all the assets of Walter Capital Opportunity, and certain related assets of Walter Investment, which together represent another $37B of MSRs for $283M.
- There's also a flow agreement in which Walter will acquire MSRs of newly-originated residential mortgages of NRZ's New Residential Mortgage. The initial deal is for three years. Alongside this, Walter's Ditech Financial will provide the subservicing.
- The deals are expected to close sometime this year.
Mon, Aug. 8, 10:03 AM
- An upgrade to "average" servicer rating is crucial not just to Ocwen Financial (OCN +3.1%) stakeholders, but to the entire servicing industry, writes John Devaney of United Capital Markets, in an open letter to S&P.
- The bottom line according to Devaney, citing the recent LL funds White Paper and his contacts who make up a sizable proportion of holders of RMBS serviced by Ocwen: Ocwen is tops in the industry, and the RMBS owners have no desire to see servicing transferred away from the company.
- Recent news further supports an upgrade, argues Devaney, noting the possible nearing of a settlement with the California monitor, the settlement of the Qui Tam case, and a Moody's report saying Ocwen is #1 in cure rate and cash flow.
- He notes Ocwen is stuck in a bureaucratic negative feedback loop in which regulators want to see the company upgraded before greenlighting more MSR buys, but S&P wants to see Ocwen greenlighted for those buys before it upgrades. He reminds Ocwen is also being held back by the perception New Residential (NYSE:NRZ) could exercise its option to transfer servicing from Ocwen should an upgrade not happen by early next year. Devaney doesn't believe NRZ would do this as returns would go down, but the issue nevertheless is out there.
- Other tickers of interest: ASPS, RESI
Tue, Aug. 2, 3:36 PM
- Among the good news at New Residential (NRZ +1.7%) is that the company is on the verge of being licensed to own MSRs in all 50 states (only CA is left for approval).
- Bearish on Ocwen Financial (NYSE:OCN), Compass Point's Fred Small wanted to know (CC transcript) from New Residential CEO Michael Nierenberg whether this is a presage to the company moving servicing from Ocwen assuming S&P doesn't come through with a servicer rating upgrade.
- Nierenberg doesn't mince words in shattering that bear thesis (for both OCN and ASPS): "No. Listen, I think we've been pretty clear. We're doing this to give us more flexibility to acquire MSRs and work with different sub-servicers ... I think it's also an added layer of protection. It's as simple as that."