PFSI

PennyMac Financial Services Inc

Finance/Real Estate


Presented:06/04/2015
Price:$19.13
Cap:N/A
Current Price:$108.95
Cap:$5.58B

Presented

Date06/04/2015
Price$19.13
Market CapN/A
Ent Value$0.41B
P/E Ratio10.8x
Book Value$10.39
Div YieldN/A
Shares O/S21.66M
Ave Daily Vol60,000
Short Int1.46%

Current

Price$108.95
Market Cap$5.58B
PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. The company’s Mortgage Banking segment is involved in the origination, acquisition, and sale of mortgage loans; and servicing of newly originated mortgage loans, and execution and management of early buyout loans. This segment also originates first-lien residential conventional and government-insured or guaranteed mortgage loans to allow customers to purchase or refinance their homes. In addition, it performs loan administration, collection, and default management activities, including the collection and remittance of loan payments; response to customer inquiries; accounting for principal and interest; holding custodial (impounded) funds for the payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising foreclosures and property dispositions, as well as provides servicing for distressed loans that have been acquired as investments by its advised entities. Its Investment Management segment is involved in sourcing, performing diligence, bidding, and completing investment asset acquisitions; managing correspondent production activities for PMT; and managing the acquired assets for the advised entities through its investment manager activities. The company was founded in 2008 and is based in Moorpark, California.

Publicly traded companies mentioned herein: BlackRock Inc (BLK), Nationstar Mortgage Holdings Inc (NSM), PennyMac Ocwen Financial Corp (OCN), PennyMac Financial Services Inc (PFSI), PennyMac Mortgage Investment Trust (PMT), PHH Corporation (PHH), Walter Investment Management Corp (WAC)

Highlights

The presenter sees "a number of attractive attributes" setting PennyMac Financial Services (PFSI) apart from peers such as Ocwen and Walter, and is long the stock. With the balance sheet overcapitalized (30% equity to assets), optionality surrounding public REIT PennyMac Mortgage Investment Trust (PMT), and shares trading at 8x his estimate of run rate annual EPS, the risk/ reward at $19 appears to be quite favorable.

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Idea Discussion

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