+ Watch PMT
on My Watchlist
Monster dividend with brilliant CEO navigating these markets. Not his first rodeo.
Has great management and PMT's share price has been pretty much steadily climbing since Oct '11. Don't know how it's going to perform in the short term, but am buying today because am expecting a nice rise in stock price over the next couple years, based on expected '13, '14 earnings ($3.40, $3.56). In the meantime, I'm happy to collect that great dividend, thank you very much!
Another beneficiary of the housing recovery.
Would like to buy this in the real portfolio, but I think I have too many REITs right now and need to diversify.
See top Bull pitch...
company is run by experienced management. buying loan pools for pennies on the dollar, modifying or selling at a high profit margin. also making money a servicing agent and in addition building its correspondent lending channels. they will become the "new and improved Countrywide" minus the mistakes. Great dividend while we wait for the money to roll in.
I like their margins and they seem to be holding/improving
Low price to tangible book, sales and eps growing ttm
Large banks are under tremendous pressure to offload these nonperforming assets at firesale prices, they simply hold too much of it. PennyMac has the expertise in converting these into profits. The management comes from Countrywide, and while they probably wrote a large percentage of these bad loans the underlying real estate has real value. Rents are increasing and prices paid for foreclosures are rising. This is a play on the bottoming of the housing market. Rising rental prices are showing us that this is very close to the low point for real estate. It is already cheaper in many areas to buy a 3 bedroom than rent a 2. 10% yield is well covered by earnings.
This stock is an unknown to many investors since it's IPO debut a year ago. What do we know about PennyMac? 1. The founders know the mortgage business inside and out. Look no further than the ex-management of Countrywide after they imploded. Should this be a sign that management doesn't know what they are doing after arguable the largest mortgage lender was sold for BofA for pennies on the dollar? I think management knows what they are doing and have learned their lesson. 2. After selling out to BofA for pennies on the dollar, PennyMac emulates what happened to them by buying defaulted mortgage Notes for pennies on the dollar. What does this mean? Let's just say they can do what every American in foreclosures wish they could get: a real loan modification that includes principal reduction, lower interest rates, and longer amortization. These defaulted mortgage Notes turn into performing loans which will reap huge profits for PennyMac in the future.3. Not only does PennyMac get the benefit of turning non-performing loans into a steady cash flow, they also are able to sell these new performing Notes for a higher value than what they originally paid. 4. Ever try buying a short sale? Have a hard time dealing with getting it approved by the lender? PennyMac can turn that defaulted mortgage Note into a short sale and still make a profit. 5. If Countrywide became one of the largest lenders in the country, you think PennyMac can start over and do the same? Although they may not be one of the largest in the new future, it appears they are back in the mortgage.For those that don't know, I am making comparisons of PennyMac to Countrywide because they are essentially the same company without Mozzillo in charge. The main difference here is that PennyMac pays out dividends as a mortgage REIT. They buy defaulted mortgage Notes AND originate new loans. Who knows more about this market than the company that pretty much started it all? This pick will either be a great one, or it will burn. I think management has learned their lesson and will not make the same mistakes as they did with Countrywide.
New REIT investing in distressed mortgages. Should be interesting to watch.
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