Alan Fournier (Trades, Portfolio) is the founder of hedge fund Pennant Capital Management and formerly worked at David Tepper (Trades, Portfolio)’s fund, Appaloosa Management. The guru on Thursday announced he made a 75.77% increase in his holding of Ocwen Financial Corp (OCN, Financial), according to Real Time Picks.
Fournier purchased 4,070,366 shares of the company, bringing his total holding to 9,442,047 shares. The holding represents 7.2% of the company’s shares outstanding. Fournier began purchasing the stock in fourth quarter 2013 when the price averaged $55 per share. It closed Thursday at $25 per share, near a 12-month low, after falling by 54% year to date.
Ocwen Financial Corp is a financial services holding company that owns subsidiaries that service and originate mortgage loans. In its second quarter, Ocwen reported revenue of $553.1 million, a 2% increase from a year prior. It also posted net income of $67.0 million, or $0.48 per share, compared to $76.7 million, or $0.53 per share, a year prior.
In the release, the company’s chairman attributed the lower earnings to “significant compliance and regulatory-related costs and higher interest expense.” The company also announced that it would begin investing in residential mortgage backed securities in the third quarter.
Ocwen repurchased 2,503,334 of its own shares for a total cost of $92.3 million in the second quarter.
Certain shareholders of Ocwen filed suit against the company on Aug. 12 over alleged violations of federal securities laws. The deadline for plaintiffs to participate in the suit is set for Oct. 14.
Ocwen’s share price:
The company trades with a P/B ratio near a two-year low at 1.9 and P/S ratio near a five-year low at 1.6. Its P/E ratio measures 11.4.
For more stock trades of Gurus in real time, visit GuruFocus’ Real Time Picks, a Premium Feature. Not a Premium Member of GuruFocus? Try it free for 7 days here.
