Tue, Nov. 24, 2:02 PM
- Consolidation in the servicer industry had been the norm prior to the housing crisis, with the market share of the top five at 59% in 2009 vs. 37% in 2001. In Q2 of this year, that market share had slipped to 40%. Nonbanks accounted for 9% of servicing in 2009, and 19% by 2014.
- With post-crisis increases in regulatory and counterparty oversight, significant boosts in costs to service mortgages (particularly NPLs), and new capital rules making it more costly to hold MSRs, it only makes sense for consolidation to return.
- Interested parties: PennyMac Mortgage (NYSE:PMT), Ocwen Financial (NYSE:OCN), Nationstar Mortgage (NYSE:NSM), New Residential (NYSE:NRZ), Altisource Portfolio (NASDAQ:ASPS), Walter Investment (NYSE:WAC).
Wed, Nov. 4, 4:59 PM
Tue, Nov. 3, 5:35 PM
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Wed, Oct. 7, 11:15 AM
- So roughed up are the mortgage REITS (REM +0.7%), that what's now a six-day rally in the sector is little more than a blip on the longer-term chart.
- There's no particular news today, but with much of the sector trading at somewhere in the area of a 15-20% or even higher discounts to book value, even the worst scenario on interest rates may be more than priced in.
- Leading the way higher today are Ellington Residential (EARN +4.3%), Javelin Mortgage (JMI +3.4%), Arlington Asset (though not a REIT) (AI +2.3%), Dynex Capital (DX +0.9%), Apollo Residential (AMTG +1.2%), PennyMac Mortgage (PMT +1%), Cherry Hill Mortgage (CHMI +1.2%), Hatteras Financial (HTS +0.5%), Two Harbors (TWO +0.8%). The action in Annaly Capital (NLY) and American Capital Agency (AGNC -0.3%) is more subdued.
- ETFs: MORL, REM, MORT, LMBS
Tue, Sep. 22, 8:09 AM
Fri, Sep. 11, 2:37 PM
Wed, Aug. 19, 8:51 AM
Thu, Aug. 6, 10:13 AM
- Q2 net income of $28M or $0.36 per share vs. $7.5M and $0.09 in Q1, and $75.2M and $0.93 one year ago.
- Net investment income of $69.8M vs. $37.7M in Q1, and $120.6M a year ago.
- Book value per share of $20.39 slipped from $20.68 at the end of Q1.
- Investment Activities Segment pretax income of $19.9M on revenue of $47M vs. pretax loss of $8.2M and $18.9M in Q1.
- Distressed mortgage portfolio generated gains of $30.1M, up from $17.2M in Q1.
- The MSR portfolio UPB grew to $37.1B vs. $35.2B. Net loan servicing fees of $13M vs. $8M.
- Correspondent Production Segment pretax income of $5.2M vs. $4.4M in Q1.
- Previously: PennyMac Mortgage misses by $0.13 (Aug. 5)
- PMT -9.3%
Wed, Aug. 5, 4:44 PM
Mon, Jul. 27, 8:21 AM
- Analyst Kevin Barker downgraded the stock to Neutral in February, and it's lower by 19% since, with two earnings misses, both of which fell short of the dividend.
- WIth the stock now selling for 84% of tangible book value and a dividend yield of 14%, the risk-reward of owning the shares is favorable, says Barker, even though he expects the payout to be cut to $0.50 (from $0.61) this year.
- A potential catalyst is coming in 2016 from PennyMac's (NYSE:PMT) multi-family investments. The upcoming Q2 earnings report could be a relatively strong one too.
- Barker upgrades to Buy with $20.50 price target.
Tue, Jul. 7, 8:03 AM
- A sell-sider finally steps into the carnage in the mortgage REIT sector. Upgraded to Outperform from Market Perform: Annaly Capital (NYSE:NLY), American Capital Agency (NASDAQ:AGNC), PennyMac Mortgage (NYSE:PMT), American Capital Mortgage (NASDAQ:MTGE), AG Mortgage (NYSE:MITT), MFA Financial (NYSE:MFA), CYS Investments (NYSE:CYS), Capstead Mortgage (NYSE:CMO), and Chimera Investment (NYSE:CIM).
- NLY +0.6%, AGNC +0.5%, MTGE +1.9%, MFA +0.9% premarket
- ETFs: MORL, REM, MORT, LMBS
Tue, Jun. 30, 3:11 PM
- The team continues to favor those mREITs creating operating businesses and that can create their own investments, making PennyMac Mortgage Investment Trust (NYSE:PMT), Two Harbors (NYSE:TWO), and New Residential (NYSE:NRZ) their top picks - though one wonders why NRZ is lumped in with the mREIT sector.
- Coverage is reinstated on Anworth Mortgage (NYSE:ANH) and Ellington Residential (NYSE:EARN) with Neutral ratings, with the bank noting both are trading to substantial discounts to book value (ANH at 22.8% and EARN at 13.3%).
- Anworth's late-2014 strategy of transforming itself into a hybrid-REIT came too late in the cycle to add a lot of value, says Credit Suisse. While Ellington's active management style should allow it to profit from trading opportunities, the drag from the short TBA position is likely to pull earnings below the current dividend in Q4.
Thu, Jun. 25, 4:38 PM
Thu, Jun. 25, 4:17 PM
- The XLU underperformed again today, losing 0.7% and bringing its year-to-date decline to more than 12%.
- Looking at equity REITs, the IYR dipped another 0.95% and VNQ fell 1%. Both are down about 6% in 2015, and roughly 15% since late January. Some individual names: Spirit Realty (SRC -2.8%), Senior Housing (SNH -1.2%), HCP (HCP -1.4%), American Realty Capital (ARCP -3%), Gramercy Property (GPT -2.8%), Duke Realty (DRE -2%).
- In mortgage REITs, REM lost 0.9% today and is off 7% YTD. Some individual names: American Capital Agency (AGNC -1.2%), Armour (ARR -1%), CYS Investments (CYS -0.9%), Annaly Capital (NLY -0.8%), Invesco Mortgage (IVR -1.2%), Apollo Residential (AMTG -1.1%), PennyMac Mortgage (PMT -2.3%), Western Asset Mortgage (WMC -2.7%).
- The 10-year Treasury yield gained three basis points to 2.40%.
- Previously: Sell-side abandoning REITs as rates rise (June 25)
- ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, ICF, SRS, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, FTY, PSR, DRA, FREL, WREI, IARAX
Thu, May 7, 8:38 AM
- Q1 net income of $7.5M or $0.09 per share down more than 70% from Q4. Pretax loss of $3.8M vs. income of $11.9M in Q4.
- Net investment income of $37.7M down 29%.
- Book value per share of $20.68 slips from $21.18.
- Investment Activities Segment pretax loss of $8.2M on revenue of $18.9M vs. a gain of $11M on revenue of $38.8M in Q4. Valuation loss of $13.7M on MBS holdings. Net servicing fees of $8M down from $11.2M thanks to MSR valuation losses as rates dropped.
- Distressed Mortgage Investments gains of $17.2M vs. $20.7M in Q4. The NPL portfolio had fewer loans transitioning from severely delinquent to foreclosure, and fewer loans transitioning into reperformance.
- Previously: PennyMac Mortgage reports Q1 results (May 6)
- PMT -1.6%
Wed, May 6, 4:39 PM
PennyMac Mortgage Investment Trust is a real estate investment trust investing in residential mortgage loans and mortgage-related assets. The Company operates in two segments: correspondent production and investment activities.
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