Do not see why is was taken so low unless some big money were already short big time then exacerbated the move with more heavy shorting and covering. They covered to be the buyer and then short again.
I have a different take on this downturn in prices in Walter. The downturn seems to make a lot of sense. First, Walter is increasingly expanding the activities of Green Tree Servicing, LLC, which it owns and Green Tree has a dreadful reputation. It is hard to imagine that Green Tree can contribute much other than embarrassment to Walter. For some idea of just what folks say about Green Tree, it helps to google Green Tree and "complaints".
Second, if you look at the balance sheet for Walter the situation does not look good. Walter claims it has 'goodwill' and 'intangible assets' of about $742 million while stockholder's equity is only $895 million. It is hard to believe that Walter's actual goodwill and intangible assets are any where close to $742 million in value. From a stockholder's point of view their share in this company could basically evaporate overnight especially with the PR nightmares Green Tree is generating for Walter. My advice to current Walter investors is to run.
Sentiment: Strong Sell
Would add to that there has been alot of insider sales in the 47$ area. Smart people those insiders.
They took action despite that projected "earning" are slated to be in the 6$ area in months to come.
Sentiment: Strong Sell
It looks like a fund dumped shares without regard to maximizing profits. If they bought in the mid 20's they still made plenty and do not care about missing a few million in profit through a slow selloff. The same thing happened with Kronos last year. Some fund bought low, dumped shares, but the stock never recovered.
I listened to most of their call to figure out what was said that could justify the downturn in the servicer group.
There was a lot of discussion about very high prepayment rate due to HARP2 refinancing, guidance of 25 to 28% and discussion what will happen if the program was extended beyond 2013. Also a lot of discussion about their ability to recapture part of the refinancing and to what extend that would compensate for the high prepayment levels. The dodged clear answers about recapture rates.
Also quite a number of analysts tried to get to what was and was not included in their guidance numbers, and even 1 analyst openly criticized them for excluding many items to get to their 'adjusted' numbers or their core earnings numbers. Also reading through their release and listening to their prepared remarks is extremely difficult to figure out their financials, because they mix up pre-tax numbers for one segment with after tax numbers, adjusted vs non- adjusted, stated that accounting one way of generating numbers for reporting, but they used a different calculation to provide guidance.....
Also they had 1 analyst severely questioning them about the much quicker increase in cost vs revenue and not being able to leverage their growth to improve profitability.
My overall impression, was this is very poorly managed or communicated, and at the end of the day with all their twisting of the numbers, nobody really knows whether they will finally turn really GAAP profitable or not and what is the actual outlook for 2013 and beyond
All above are just impressions, I only follow WAC for competitive monitoring since I'm more interested in OCN, ASPS, HLSS
Thank you for taking the time to respond. It does make more sense for such a drop after reading your reply. In this day and age when truth is a bad word giving a report that leaves one confused because they can not clarify their answers you want to stay away. May you have great success in your trading.
You are correct-- it barely missed, and outlook remains solid. A lot of times investors use the excuse of manipulation, but that downside manipulation by some big money and the day trading momentum traders that followed, created an amazing buying opportunity. Everyone states, I want to buy on a dip, well here you go-- load up. I already have a sell limit order in at $40 for half my position I bought today, and letting the other half ride. Easy, money if you ask me.
Sentiment: Strong Buy
I know it had a 3 cent miss but the guidance was significantly higher. Often this means the stock goes up. With the small float it is very easy for big money to control the price of the stock but this big of a drop. Has to be something that I am missing.
Obviously I was missing something. I just read another article sharing that their guidance was lower than expected. If didn't give details so still somewhat at a loss as to the amount of the decline yesterday/