Leon Cooperman Slashes Stake in PennyMac Financial Services

GuruFocus.com

Hedge fund manager Leon Cooperman (Trades, Portfolio) held 2,759,600 shares of PennyMac Financial Services (PFSI) until reducing the position by 76.75% on Thursday, March 27, according to GuruFocus Real Time Picks. Cooperman sold the shares at a price of $15.99 each, down roughly 13% since the previous Monday. He retains 641,600 shares of the company.


PennyMac's stock began to fall last week when the company announced on March 24 the commencement of an underwritten secondary public offering of 5,554,545 shares being sold by Fidelity Investments Charitable Gift Fund. Proffered shares were priced at $16.50 each, and the offering closed on April 1.

Cooperman acquired his PennyMac holding in the second quarter of 2013, when the price averaged $21. He had not bought or sold shares of the company since beginning the stake. The price at $16.64 a share on Tuesday is 21% off of his average buy price.

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PennyMac is a company that produces and services U.S. residential mortgage loans and manages investments in the U.S. residential mortgage market. It was formed in 2008 by several executives and its strategic partners, BlackRock (BLK) and Highfields. The company's principal mortgage banking subsidiary, PennyMac Loan Services LLC, is also a seller/servicer for government sponsored entities Fannie Mae (FNMA) and Freddie Mac (FMCC).

For the fourth quarter, PennyMac reported $37.3 million in net income, down from $31.4 million in the prior quarter. Revenue totaled $90.4 million, up 4% from the prior quarter. The company ended the year with $30.6 million in cash, down from $56.4 million the prior quarter.

PennyMac's P/E at 16.4 and P/B of 1.88 are both close to their respective, one-year lows. It has a P/S of 3.27.

This sell was reported using GuruFocus Real Time Picks, which is a Premium Member feature only. Not a Premium Member of GuruFocus? Try it free for 7 days here!
This article first appeared on GuruFocus.
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