Home Loan Servicing Solutions - Momentum
October 23 2012 - 8:00PM
Zacks
Since its third quarter results last week, shares of
Home Loan
Servicing Solutions, Ltd. (HLSS) have surged about 5.2% to hit
a fresh 52-week high of $19.90 on October 22. It also has a solid
year-to-date return of 51.3% and an expected long-term earnings
growth rate of 5%. The rising share price and positive estimate
revisions make this Zacks #1 Rank (Strong Buy) mortgage servicing
company a solid momentum pick.
Stable Q3 Results
On October 18, Home Loan Servicing Solutions reported third
quarter 2012 earnings of 34 cents per share, significantly ahead of
last year’s loss at $1.90. However, earnings were a penny below the
Zacks Consensus Estimate. Year-over-year results benefited from
solid top line growth, partially offset by higher expenses.
Total revenue stood at $28.5 million. The company's income from
operations came in at $12.9 million, compared to a loss from
operations of $0.038 million last year.
Earnings Momentum on the Rise
For 2012, the Zacks Consensus Estimate has gained 6.1% to $1.40
per share over the past 30 days, as 5 of 7 estimates were revised
higher. For 2013, the Zacks Consensus Estimate is up 13.1% to
$1.55, again on 5 upward revisions out of 7. This implies
year-over-year growth of 10.9%.
Reasonable Valuation
Home Loan Servicing Solutions currently trades at 14.0x 12-month
forward earnings, an 11% discount to the peer group average of
15.8x. Its price to book ratio of 0.66 is 7.0% below the peer group
average of 0.71.
Chart Shows Strength
Home Loan Servicing Solutions has witnessed strong price
momentum since the third quarter earnings release. Moreover, the
company has been continuously outperforming its 50-day moving
average since July 5. The year-to-date return for the stock is
51.3%, compared with the S&P 500’s return of 5.0%.
Based in George Town, Cayman Islands, Home Loan Servicing is a
mortgage investment company. Founded in 2010, the company together
with its subsidiaries is engaged in acquiring mortgage servicing
assets, mainly subprime and Alt-A mortgage servicing rights and
associated servicing advances. With a market capital of
approximately $277.7 million, Home Loan Servicing competes with
Ellington Financial LLC (EFC), among others.
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HOME LOAN SERVC (HLSS): Free Stock Analysis Report
HOME LOAN SERVC (HLSS): Free Stock Analysis Report
HOME LOAN SERVC (HLSS): Free Stock Analysis Report
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