New Residential Investment's (NRZ) CEO Michael Nierenberg on Q3 2014 Results - Earnings Call Transcript
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Update: New Residential Makes A Bundle Off The SpringCastle Portfolio
- New Residential has completed a $2.6 billion refinancing of the SpringCastle portfolio.
- The company owns a 30% interest in the loan portfolio, with Springleaf Finance and Blackstone as co-investors.
- New Residential has made an impressive 71% IRR on its investment in the SpringCastle portfolio.
- This event bodes well for the stock, with shares rallying 3% on the news.
High-Yielding Stock Portfolio That Can Outperform By A Big Margin
- Creating a high-yielding stock portfolio that can outperform the market by a big margin.
- 15-years back-testing of the portfolio’s method has given an extremely high average compound annual return of 21.77%.
- Description and a buy recommendation for the company with the highest yield in the portfolio; New Residential Investment.
New Residential: A Directional Play On Interest Rates
Thu, Nov. 6, 12:31 PM
- Amid an earnings miss and lowered guidance, Walter Investment (WAC -20.2%) discloses inquiries from a number of state agencies into its Green Tree Servicing unit.
- Previously: Walter Investment reports sizable decline in earnings
- Earnings fell at Nationstar Mortgage (NSM -20.6%), but in a bit of good news, the company did say it entered into commitments for $43B in new MSR acquisitions.
- Finally, there's lesser-followed Stonegate Mortgage (SGM -15.9%), which went public just more than a year ago, missing estimates by a wide margin with CEO Jim Cutillo noting "industry headwinds and interest rate volatility." The company's servicing portfolio ended Q3 with $17.7B UPB, up 48% this year and up 82% Y/Y.
- New Residential (NYSE:NRZ) - a specialty servicer, but with a somewhat different business model than the other three - reported solid results today and is flat on the session.
Thu, Nov. 6, 7:23 AM
- Q3 core earnings of $63M or $0.43 per share vs. $56M and $0.40 in Q2. Dividend is $0.35.
- Excess MSR deals: During quarter NRZ invested or committed to invest $66M to acquire an average 35% interest in five seasoned excess MSR pools related to $25B in UPB of mortgage loans.
- Non-agency RMBS deal: New Residential collapsed 19 non-agency securitizations with $534M UPB of loans, and in October sold $464M UPB. The remaining $70M UPB is held for investment.
- Conference call at 8 ET
- Previously: New Residential Investment EPS of $0.43
- Shares flat premarket
Thu, Nov. 6, 7:16 AM
Wed, Oct. 22, 11:06 AM
- Bank of America and Evercore Partners throw in the towel on Ocwen Financial (OCN -8.5%), downgrading to Neutral/Hold, following yesterday's letter from Ben Lawsky's NY Dept. of Financial Services and the company's bungled response.
- Is it time to start thinking about a takeout? Sitting on Ocwen's board and presumably still a sizable shareholder is Wilbur Ross (NASDAQ:WLRH) who sold his Homeward Residential Holdings to Ocwen in 2012.
- Altisource Portfolio Solutions (ASPS -9.6%), Home Loan Servicing Solutions (HLSS -5.3%), Altisource Asset Management (AAMC -4.3%), Altisource Residential (RESI -4.5%).
- Other industry players: Nationstar Mortgage (NSM), Walter Investment (WAC +0.5%), New Residential (NRZ +0.1%), PennyMac FInancial (PFSI -0.4%).
- Previously: Moody's downgrades Ocwen following DFS allegations
Tue, Oct. 21, 12:25 PM
Mon, Oct. 20, 12:50 PM
Mon, Oct. 20, 9:53 AM
Fri, Oct. 17, 3:53 PM
- Newcastle Investment (NCT -1.6%) sees the combined value of its businesses as worth $13.40-$14.82 per share vs. the current share price just above $12. Soon to be spun off New Senior (SNR) is worth between $10 and $11, and that leaves the legacy CDO portfolio worth $2.20 and $2.59 and the golf course business worth $1 and $1.32.
- Webcast and presentation
- Webcast transcript
- The record since the Newcastle complex began raising capital in 2011 is a combined total return of 224% since (includes NCT return, dividends, NRZ, and NEWM)
- Alongside the spinoff of New Senior (shares to be distributed on Nov. 6 and begin trading on Nov. 7), Newcastle will undergo a 1:2 reverse stock split.
- Previously: Newcastle sets date of senior living business spinoff
Mon, Oct. 6, 3:14 PM
- "While we continue to think the regulatory overhang on the industry will eventually be lifted, we still expect servicing acquisition activity to remain slow," says KBW in its latest report on nonbank mortgage servicers.
- The long-term EPS trend is down thanks to: 1) An increase in the percentage of new, lower-return, prime servicing; 2) A reduction in ancillary fees such as those from HAMP and late fees; 3) A reduction in mortgage banking income driven by the end of HARP next year.
- While Nationstar (NSM -0.9%) was downgraded to Sell, Ocwen Financial (OCN -2.1%) and Walter Investment (WAC -0.4%) had their price targets cut to $28 from $33, and $22 from $26, respectively.
- New Residential (NRZ +3.2%) and Home Loan Servicing (HLSS +0.6%) - partner servicing companies to Nationstar and Ocwen - however, were reiterated as Outperforms as both are well-positioned to maintain dividends into 2015. "As we noted earlier," says KBW, "servicing sales will continue, albeit at a slower pace than in the past."
- Previously: Nationstar Mortgage downgraded at KBW
Mon, Oct. 6, 10:01 AM
- The SpringCastle portfolio - with an original UPB of $4.2B - was acquired from HSBC by New Residential (NRZ +3.4%) and co-investors, including Springleaf Financial (LEAF +1.6%) 18 months ago for about $3B. The deal was financed with $2.2B of asset-backed notes and $800M of equity, with NRZ putting up $421M and getting a 30% interest.
- Since the purchase, credit performance has materially improved, with charge-off rates lower by 42% to 7.1%, and the average FICO score up to 639 from 627.
- The co-investors today announce a $2.6B refinancing of the portfolio, which now has a UPB of $2.7B
- Between distributions and the cash-out refinance, NRZ has received to-date cash flows of $460M. The company's IRR to-date is 71%, and NRZ expects substantial cash flow from the portfolio in the future.
- Source: Press Release
Thu, Sep. 18, 6:35 PM| 1 Comment
Wed, Aug. 6, 7:57 AM
- Q2 core earnings of $56M or $0.20 per share vs. $42M and $0.16 in Q1. Regular dividend is $0.175 (special dividend of $0.075 was also declared during Q).
- A 1:2 reverse stock split is proposed with a special meeting to confirm the move set for October 15.
- Conference call at 10 ET
- Previously: New Residential Investment reports Q2 profit
- NRZ flat premarket
Wed, Aug. 6, 7:39 AM
Tue, Jul. 1, 10:39 AM
- Noting some nonbank servicers use short-term funding to buy MSRs which may only pay off after a lot of long-term work the Office of Inspector General says the practice can jeopardize not just the companies' operations, but also Fannie Mae (FNMA) and Freddie Mac (FMCC) which guarantee the loans.
- The report notes nonbank servicers held 17% of he MSR market at the end of 2013, up from 9% a year earlier, and the boosted share is testing their ability to handle the loans. No particular servicer is named in the report, but those in the industry include Ocwen (OCN -1.9%), Nationstar (NSM -2.6%), Walter Investment (WAC -0.8%), New Residential (NRZ +0.3%), Home Loan Serviing (HLSS +0.9%), and PennyMac Financial Services (PFSI +0.5%).
- The report cites one example in which the GSEs found a servicer didn't have sufficient infrastructure to manage its MSRs and also breached minimum capital requirements.
- NY's Ben Lawsky, of course, has put the kibbosh on transfers of servicing rights from the banks to the nonbank players until his concerns over servicing practices are satisfied.
Tue, Jun. 17, 10:19 AM| 5 Comments
Tue, Jun. 17, 9:02 AM| Comment!
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