When will HLSS go ahead and execute the overdue flow purchase?
Anyone have any idea why HLSS has held off executing a flow purchase to reinvest the cash in earnings producing assets?
End of Dec they held 76 mill in cash - previous quarters about mid 30 millions, so thats an excess of 40 mill.
Also they had 28 mill receivable from Ocwen (previous quaters none). Add to that the 17.6 mill from the jan over-allottment exercise, plus at least 15 million of cash generated from january operations.
That brings it to about 100 million of available cash sitting around and not earning income.
But in their model quick cash reinvestment is needed to help off-set the contractuel retained fee step-downs, to generate sufficient earnings to cover dividend payments.
I am not going to pretend I can answer that question, but I would think they need to increase there cash position with every round of servicing writes they acquire, if for no other reason than to cover the div for they ever increasing expansion of shares outstanding. The question I have is why have we not heard from them about the next secondary and acquisition of additional rights. It seemed like they were going be aggressive after the last filing...They have allowed the share price to slip...less bang for the buck!
for the secondary I think they are waiting to have 1 year of operation, (sometime early part of march) so that they can do the secondary with an S-3 filling which is shorter than the current S-1 process. This was discussed during the last conference call.
For the divi at current share count that comes to about 7.4 million per month. So thats quite some way from the estimate cash balance they should currently be carrying.