On Tuesday, Ocwen Financial Corporation (OCN) announced the launching of a new product named PlatformPlus. The company’s intention to introduce this product is to provide more value to buyers of non-performing loan portfolios or residuals of private-label securities.
With the help of this product coupled with Ocwen’s established technology and management, investors in troubled assets will be able to set up a high-tech specialty servicing operation for assessment purpose. .
On the flip side, if investors establish their own platform for assessing such distressed assets prior to buying, it would involve huge investments and risks. Therefore, working with Ocwen in developing such servicing operation will enable investors of such assets to obtain Ocwen's strong track-record of success and easily scalable platform. Further, such platform will be acquired at a relatively low cost and with more assurance.
Moreover, PlatformPlus provides several components to investors including right to use Ocwen's industry-leading technology with continuing improvements, management services to recruit and build-out the operation, constant updates on regulatory changes, Ocwen’s innovative developments and access to Ocwen's network of service providers, such as Altisource.
Although Ocwen’s near-term outlook remains cautious owing to market volatility and a contraction in subprime MSR market, Ocwen remains committed to new business acquisition and loan modifications. These are expected to gradually convert into increased profitability.
Estimate Revision Trends
Over the last 30 days, 1 of the 4 analysts covering Ocwen has lowered estimate for the second quarter of 2011, while no upward revision was witnessed. Furthermore, for full-year 2011, 1 of the 4 analysts has decreased estimate, while two moved north over the last 30 days.
Currently, the Zacks Consensus Estimate for the second quarter is operating earnings of 30 cents per share, a surge of 29.35% from the year-ago quarter. Furthermore, over the last 30 days, operating earnings estimate for the second quarter and full-year 2011 remained stable.
Ocwencurrently retains its Zacks #4 Rank, which translates into a short-term Sell rating. However, the closest peer of Ocwen, Ellington Financial LLC (EFC) retains a Zacks #3 Rank (a short-term Hold rating) on the stock.
ELLINGTON FINL (EFC): Free Stock Analysis Report
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