COOP
Mr. Cooper Group Inc
Finance/Real Estate
05/04/2020
Presented
| Date | 04/29/2020 |
| Price | $9.39 |
| Market Cap | $0.86B |
| Ent Value | $12.66B |
| P/E Ratio | 3.06x |
| Book Value | $22.51 |
| Div Yield | 0% |
| Shares O/S | 91.97M |
| Ave Daily Vol | 1,043,483 |
| Short Int | 5.11% |
Current
| Price | $95.93 |
| Market Cap | $6.19B |
| Mr. Cooper Group, Inc. engages in the provision of residential loan services. It operated through the following segments: Servicing, Originations, Xome, and Corporate/Other. The Servicing segment consists of collecting loan payments, remitting principal and interest payments to investors, managing escrow funds for the payment of mortgage-related expenses, such as taxes and insurance, performing loss mitigation activities on behalf of investors and otherwise administering mortgage loan servicing portfolio. The Originations segment provides refinance opportunities to the existing servicing customers through direct-to-consumer platform and purchases loans from originators through correspondent channel. The Xome segment offers technology and data-enhanced solutions to banks, non-banks, investment companies, and GSEs engaged in the origination, investment, servicing of mortgage loans, as well as to home buyers, home sellers, real estate professionals mortgage professionals, and real estate investors. The Corporate/Other segment comprises unallocated overhead expenses, including the costs of executive management and other corporate functions that are not directly attributable to operating segments, senior unsecured notes, and the results of a legacy mortgage investment portfolio. The company was founded in 1889 and is headquartered in Coppell, TX. |
Publicly traded companies mentioned herein: CIT Group Inc (CIT), Federal Home Loan Mortgage Corp (FMCC), Federal National Mortgage Association (FNMA), KKR & Co Inc (KKR), Mr Cooper Group Inc (COOP), New Residential Investment Corp (NRZ), PennyMac Financial Services Inc (PFSI)
Highlights
The presenter purchased shares of COOP about a year ago due to strong free cash flow in a gain-on-sale environment for mortgage servicers. He finds it even more attractive now, as MSR market instability is adding selling pressure to the entire vertical, but can end up being a positive development for the company. He views the company as a player in the mortgage servicing space that is “almost as good” as PFSI while priced at a much more attractive valuation. While regulatory action requiring forbearance from servicers can hurt short term financial performance, it is expected to position COOP to take a larger share of the market as smaller competitors become insolvent.
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