Long Position on PFSI @ $31.75 on 11/14/2019 (Momentum)

PennyMac Financial Services (PFSI) engages in the mortgage banking and investment management activities in the United States.

It operates through three segments: Loan Production, Loan Servicing, and Investment Management.

The Loan Production segment is involved in the origination, acquisition, and sale of mortgage loans. This segment originates first-lien residential conventional and government-insured or guaranteed mortgage loans.

The Loan Servicing segment engages in the servicing of newly originated mortgage loans, and execution and management of early buyout loans. It performs loan administration, collection, and default management activities, including the collection and remittance of loan payments; response to customer inquiries; accounting for principal and interest; holding custodial funds for the payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising foreclosures and property dispositions. This segment also services conventional and government-insured or guaranteed loans; and distressed mortgage loans that have been acquired as investments by its advised entities.

The Investment Management segment is involved in sourcing, performing diligence, bidding, and closing investment asset acquisitions; managing correspondent production activities for PennyMac Mortgage Investment Trust; and managing the acquired assets.

Shares have formed a bullish "cup and handlle" and have just moved above their 50-day moving average. On October 31st, Pennymac reported 3rd Quarter September 2019 earnings of $1.51 per share on revenue of $436.3 million. The consensus earnings estimate was $1.25 per share on revenue of $343.7 million. Revenue grew 73.9% on a year-over-year basis.

Entry Point: $31.75

Stop Loss: $30.10

Trading Range: $19.28 - $33.46

Target Price: $34.95

Updates

12/24/2019 12:43:02 PM

PFSI closed at $33.86

Position closed on 12/24/2019 at price of $33.86 with a 6.65% gain in 40 days.

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