Nice writeup, they have a similar company profile as FN.TO (wholesale mortgages, government backed mortgages focused) and WD (multifamily lending, GSE backed).
I just need to get over the company structure of UWMC before buying a position. You really have to just trust the management to treat minority shareholders right.
I don't give out price targets. I am also not in $UWMC - have been out for a while, it is a company I track. I will re-enter once the catalysts I am waiting for start to materialize
1. In regards to hedging disasters and 2024 not covering the dividend, Mat bet big on interest rates dropping in 4Q. He had to write off 469M due to the rise in rates that quarter and sold out of the position. What should have been a very good quarter with MSR fair value increasing due to rates rising was ruined. Without that, they cover the 2024 dividend easily.
2. SFS instituted a plan to convert class D shares to A and sell 80M shares to increase the public float. They currently just started the 2nd 90 day tranche, selling about 600k shares a day (up from 400k a day in tranche #1). They should be done selling in Jan 2026.
But hey mate, dont u think its time to short home builders? Fed Shouldnt continue lowing interest rate, and if it does, the mortgages are linked to 30 years, and the rates must go down because of inflation expectations
Nice writeup, they have a similar company profile as FN.TO (wholesale mortgages, government backed mortgages focused) and WD (multifamily lending, GSE backed).
I just need to get over the company structure of UWMC before buying a position. You really have to just trust the management to treat minority shareholders right.
This is an excellent write up. Thank you for putting it all together. How much do you think the stock is worth?
I don't give out price targets. I am also not in $UWMC - have been out for a while, it is a company I track. I will re-enter once the catalysts I am waiting for start to materialize
Very nice write-up. A couple of things:
1. In regards to hedging disasters and 2024 not covering the dividend, Mat bet big on interest rates dropping in 4Q. He had to write off 469M due to the rise in rates that quarter and sold out of the position. What should have been a very good quarter with MSR fair value increasing due to rates rising was ruined. Without that, they cover the 2024 dividend easily.
2. SFS instituted a plan to convert class D shares to A and sell 80M shares to increase the public float. They currently just started the 2nd 90 day tranche, selling about 600k shares a day (up from 400k a day in tranche #1). They should be done selling in Jan 2026.
Thanks for the color
But hey mate, dont u think its time to short home builders? Fed Shouldnt continue lowing interest rate, and if it does, the mortgages are linked to 30 years, and the rates must go down because of inflation expectations
If you read the homebuilder article, you’ll see that I’m talking about increasing activity will lead to better price discovery.
Spike in liquidity doesn’t mean prices will go up, they are two different things