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Nam Tai Electronics, Inc. Message Board

jch548 3 posts  |  Last Activity: Jul 17, 2014 10:52 AM Member since: Aug 2, 2001
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  • Reply to

    Wells Fargo downgrades

    by rdravin Jul 16, 2014 10:31 AM
    jch548 jch548 Jul 17, 2014 10:52 AM Flag

    What has changed all of a sudden to cause a downgrade? Seems rather suspect to me.

    I understand the DCF and implications of a run-off in servicing rights but the six or seven year life of these rights doesn't speak to the fact that they are always adding MSR balances to their pile via acquisitions and originations. Via originations would be the key here as this is organic. UPB of MSRs should be greater at the end of Q2 vs Q1.

    Also, equally important is the Originations business which is generating annual ebitda at a $128mm rate. This is worth a billion at an eight times multiple. Net of associated debt this has to be worth something $600mm, $800mm? WAC market cap is barely over $1B.

    It all looks rather bullish. I guess what bothers me at the moment is the $36mm in interest expense that went unallocated to any of their segments. I mean what is this debt supporting?

  • Reply to

    New member intro, "Big 3", and what about SPCB?

    by merouleau Jun 19, 2014 7:23 PM
    jch548 jch548 Jun 20, 2014 9:45 AM Flag

    I went with MX after looking over the financials. Tripped up by accounting issues. No financials since Q313 but the company stated their cash and debt levels won't change. The problem was some sales being booked to distributors when shipped to them but not sold.

    Their financials look pretty decent in that debt hasn't gone up much over a multi year period while the company has done buy backs, capex, R&D etc. With all these expenditures and the fact that debt hasn't increased much gives me some comfort that the final adjustment shouldn't be disastrous and the stock could be significantly undervalued.

  • jch548 by jch548 Jun 14, 2014 10:51 AM Flag

    Nobody around here talking WAC numbers? These servicers and originators have certainly fallen out of favor. I'm guessing the market is concerned with runoff of servicing rights and regulatory matters. Perhaps the fears are overdone. WAC recently stated that their UPB of servicing rights is slightly higher than the balance at the end of Q114. Since they originate loans and retain servicing rights the burn rate of their UPB could be significantly longer than seven years.

    FCF looks very good. By my calculations WAC could FCF near $400mm this year. Plenty of money to make acquisitions or pay down debt. That's nearing a 40% yield on the common.

NTE
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