Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Ocwen Financial Are Jumping Today

By Lou Whiteman - Feb 18, 2020 at 3:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A big-name investor talked up the shares during a midday television appearance.

What happened

Shares of Ocwen Financial Corporation (OCN -1.25%) jumped more than 10% on Tuesday after hedge fund manager Leon Cooperman recommended the mortgage servicing company. The stock is down 20% over the past year, and Cooperman believes it is oversold.

So what

Ocwen is a non-bank financial company that handles the administrative tasks associated with a loan, including sending statements and receiving payments. The company acquired PHH Corporation in October 2018 to expand its operations, but the purchase saddled Ocwen with significant debt and has weighed on operations.

A for sale sign in front of a house.

Image source: Getty Images.

Speaking on CNBC on Tuesday, Cooperman said that investors are not paying attention to Ocwen. He said the company has a book value of $3.50 per share, well in excess of its $1.40 per share trading price at the time he spoke.

Now what

Ocwen announced a $5 million share buyback plan earlier this month and said it is on track to return to profitability by the second half of 2020. The company also boosted its full-year 2020 origination volume target to at least $15 billion, from a prior target of $10 billion. Housing demand has held up well, and should help Ocwen to grow its business in the quarters to come.

The company still has a long road ahead of it, but for patient investors, Cooperman sees an opportunity in shares of Ocwen Financial.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ocwen Financial Corporation Stock Quote
Ocwen Financial Corporation
OCN
$29.33 (-1.25%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
403%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.