SA Transcripts • Sun, Nov. 9
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- Stonegate Mortgage has been a disappointment over the last year.
- I did not foresee the extreme regulatory pressure the mortgage servicing industry would face.
- Eventually the industry headwinds will subside, but it could be a choppy sea for the stock until then.
Stonegate Mortgage - A Value Trap With Dubious Adjusted Financials
- We believe Stonegate Mortgage investors will suffer significant losses as many issues we identify play out. We have well-researched reservations about the viability/sustainability of its business model.
- We believe management changed definitions for adjusted earnings without appropriate disclosures, and excluded recurring expenses (that don't reconcile). Both appear violations of SEC reporting guidelines (Reg G).
- Stonegate continues to raise capital on overstated projections and an MSR mark 32% higher than its peers. Sellside estimates have declined nearly 50% in eight months.
- We believe sell-side estimates are 67% too high, and at least 33% downside exists in the stock, and significantly more should its correspondent mortgage model fail to attract new capital.
Stonegate Mortgage: 3 Different Insiders Have Purchased Shares During The Last 30 DaysMarkus Aarnio • Fri, Jun. 6
- 3 insiders purchased Stonegate Mortgage stock within one month.
- The stock was sold by no insiders in the month of intensive purchasing.
- 2 of these 3 insiders increased their holdings by more than 10%.
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, 7:35 AM| Comment!
Thu, Aug. 7, 8:10 AM| Comment!
Fri, May. 16, 11:56 AM
- Raymond James upgrades Bank of the Ozarks (OZRK -0.2%) to Outperform with $67 PT.
- Home Bancshares (HOMB +1.8%) is boosted to a Buy at both KBW and Drexel Hamilton
- Credit Suisse upgrades NASDAQ OMX (NDAQ -0.6%) to Buy with $42 PT.
- Bank of America boosts Protective Life (PL +0.1%) to Buy and sets a $62 PT.
- KBW upgrades Stonegate Mortgage (SGM +4.4%) to Outperform with $17 PT after the company reported earnings yesterday.
- Bank of America downgrades Assurant (AIZ -1.3%) to Under Perform with a $73 PT.
Thu, May. 15, 7:58 AM| 1 Comment
Mon, Feb. 24, 4:54 PM| Comment!
Nov. 22, 2013, 9:24 AM
Nov. 18, 2013, 8:09 AM
- Calling Stonegate (SGM) well-positioned to take advantage of the market shift to non-bank originators, analyst Paul Miller initiates the company with a Buy and $21 price target.
- He sees FY14 and FY15 EPS at $3.50 and $6 respectively, with tangible book value rising to $22.31 by year-end 2015 "should the company achieve its targeted origination and servicing portfolio growth."
- Stonegate had unfortunate timing with its IPO last month coming at a time of slowing originations and when investors were ready to take a break from the previously red-hot non-bank originators/servicers like Nationstar (NSM) and Ocwen (OCN).
Nov. 14, 2013, 7:52 AM
SGM vs. ETF Alternatives
Stonegate Mortgage Corporation originates, acquires, sells, finances and services residential mortgage loans. The Company predominantly sells mortgage loans to the Federal National Mortgage Association and Government National Mortgage Association pools.
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