1. The situation in Ukraine
2. Corn prices are up
3. Technicals - Some ag names recently broke above the 200 DMA. This often triggers automatic buying by computers.
I wouldn't fault anyone for selling on a nearly 7% pop because Lawsky is probably going to investigate WAC at some point and the stock will drop 5-10%. It's just a matter of time. I'm holding and will buy on the dip if it happens.
I actually thought about sending an email to the SEC to investigate. However, I have a feeling this guy is just on some power trip. New York is a state made up of arrogant pricks and heavy regulations. It sucks that a national company can be beaten down by one person from one state just because of a few customer complaints. If complaints were tied to all company's stock prices, Comcast and Time Warner would be lucky to see their stock prices above 1.00.
The sad part is this board has very little activity, so some genius out there decided to spam to basically no one. They probably also have a billboard in Antarctica.
Geez, Lawsky strikes again. This time it's Nationstar. This guy is killing me. He opens his mouth and we lose 5% in a second.
I wish I could tell which one is responsible for the increase in share price. Yahoo updated their numbers, so now it shows the actual 2013 GAAP EPS, which puts the trailing P/E near 4. Institutions may finally be realizing this stock is undervalued even when considering the regulatory concerns. A point increase every day puts me in the green by Friday.
The housing market is anything but slow. Even if it was slow, WAC does mostly refinances. Their purchase business adds very little to the bottom line. Interest rates are by far the biggest factor on the Originations business. If the national average on a 30 year fixed rate can get back down to 4% or lower, you'll see a huge price spike in this stock. I'm not optimistic about this quarter. I think it will be similar to last quarter.
WAC took on the bulk of MSRs in February and April 2013. GAAP EPS for the Servicing business went from 1.52 in Q2 to 0.98 in Q3 to 0.38 in Q4. I certainly lack accounting knowledge of the amortization of these MSRs, but that decrease really bothers me. I know there were increased costs in the Servicing business, but I was expecting the company to be able to make close to 4.00/share just on the Servicing business. That doesn't appear to be the case now. On the conference call, they did say they expect a 2-4 basis point increase in Servicing margin this year, but that's not much. I'll be holding my shares, but I probably won't try to average down any more at this point.
I read the report prior to looking at the pre-market price. After reading, I guessed the stock would be down about 10%. It was down 11%. The drop in Servicing EPS was a killer. Then a bunch of other bad numbers, followed by lower guidance for 2014. No more buying for this guy. Where's the catalyst that will send us higher? No retail investors, higher regulation, declining earnings for 2014, interest rates probably aren't going lower, etc.
Schwab and MS must be separating out the Class A shares from the rest. My guess is they took the 297M non-Class A shares and added in the first tranche of 43M shares to get 340M. They added those shares in because the company is in the process of converting those shares to treasury shares before ultimately retiring them. 398M is the more accurate number by my calculation.
Shorts are having a field day with this sector. Close to 40% of NSM's float is short. Some dumb broad in California is now calling for more regulation. As the Seeking Alpha article said yesterday, WAC should be able to earn nearly 4.00 EPS just with it's current servicing portfolio. The regulators might try to stop future MSR purchases, but they aren't going to take current loans away from the servicers. I'm convinced that it's only a matter of time before some big investor like Buffet or Icahn will take a position in one or more of these stocks. They love to buy stocks everyone else hates. I'm going to continue buying. I can't remember the last time I saw a stock trading at a forward P/E of 4.
Although all 3 companies have a ton of complaints, the majority of them are from people somewhere in the loss mitigation process, so there is a credibility issue to take into account. OCN, NSM and WAC service mostly junk loans. They buy the loans that WFC, BAC and C do not want. Most complaints come from people who simply do not understand the business. I can't believe how many people think it's illegal for a mortgage servicer to sell the servicing right to another company. A lot of people think they're entitled to be approved for HAMP or HARP without providing any paperwork just because these are government programs. I realize there are some legitimate complaints and the government agencies have an obligation to look into each one. Once their investigation is complete, I'd be willing to bet they find most of the complaints are invalid. I've searched through many of the complaints on the Consumer Affairs website and can tell right away if it's a valid complaint or just someone who doesn't know the rules and regulations within the mortgage industry.
When this was trading at 500 on 1/28/14, I guaranteed it would be back to 550 by the end of February. The evidence is right in this thread. I guess I should have said 2/18/14 instead.
I'm almost tapped out on cash. I put in a limit order at 27.90 for today only. If the price keeps falling, I may sell shares of other companies to buy more WAC. I'd be happy if my average was around 30. Right now, it's at about 32. This thing should move up eventually.
I was watching but I was not learning anything from you. My 550 prediction by the end of February seems to be right on track, if not ahead of schedule.
Someone seriously needs to look into this guy's family and friends' trading accounts. His buddies are probably shorting WAC, NSM and OCN. I'm going to find this guy's contact info and give him an earful. I'm so tired of these government officials trying to play God with the markets. I don't see anyone telling GOOG,,AMZN or NFLX they're growing too fast. Does this guy seriously think WFC, C, JPM and BAC can provide better service to these homeowners than the companies which specialize in it?