Bob, where do you see the risk in this stock. In my mind, all stocks have some risk, but at this price, I don't see NCT having too much downside. IMHO, NCT's biggest risk is not a business risk, its a perception risk. I don't see NCT losing money on these deals or at least not much money in a worse case scenario. The perception risk, I see, is that there is still the stigma overhanging 2008 and investments in mortgages. If a MSR returns less than 10%, skittish investors will overreact.
Code: The MSR business will affect NRZ, not NCT as NRZ is getting the MSR business. NCT has done a superb job, over the past 4-5 years buying back it's debt at pennies on the dollar so the 2008 meltdown is old, old news and anyone that dredges up that information (see article) has ulterior motives in my mind. As with any stock doing what NCT is on the verge of doing there is always the question as to how the two entities will do on their own. I'm sure Ken and the boys have done a great job in splitting the assets and valuing the two companies fairly. Their projections, save a major market drop should certainly be right on target as they've had ample time, with the SEC delay, to fine tune things. I'm not in the least bit apprehensive holding my position and I expect if each entity performs as expected the stock valuations will take care of themselves. With real estate certainly showing an upwards bias, things should only get better from hereon in. Foreclosures are down, refinancing is slowing, prepays are down and RE values are up in every report. Can't do much better than that.