1. Mr. Cooper Group Inc. (NASDAQ:COOP)
Total Number of Shares Owned: 2,860,600
Total Value of Shares Owned: $232,366,538
Number of Hedge Fund Investors: 37
In Q2 2024, Mr. Cooper Group Inc. (NASDAQ:COOP) reported impressive earnings, with earnings per share (EPS) of $2.52, surpassing analyst expectations of $2.33. Mr. Cooper Group Inc. (NASDAQ:COOP) also achieved a revenue of $583 million, reflecting a 3.4% increase from the previous year. Notably, Mr. Cooper Group Inc. (NASDAQ:COOP) pretax operating income soared by 46% year-over-year to $219 million, highlighting significant operational efficiency and profitability.
A key factor in this positive outlook is the strategic acquisition of Flagstar’s mortgage operations for $1.4 billion in cash. This acquisition brought in $1.2 billion in mortgage servicing rights and expanded Mr. Cooper Group Inc. (NASDAQ:COOP)’s servicing portfolio to a total of $1.2 trillion, significantly bolstering its servicing business. With a growing subservicing mix making up 52% of the portfolio, this move strengthens Mr. Cooper Group Inc. (NASDAQ:COOP)’s position in the market.
Additionally, Mr. Cooper Group Inc. (NASDAQ:COOP)’s tangible book value per share increased by 17% year-over-year to $68.67, demonstrating solid financial health.Mr. Cooper Group Inc. (NASDAQ:COOP) has also been proactive in returning value to shareholders, reducing outstanding shares by 4% over the past year through its share repurchase program and allocating an additional $200 million for future buybacks.
Moreover, Mr. Cooper Group Inc. (NASDAQ:COOP)’s servicing revenue grew by 37% year-over-year, supported by a record low delinquency rate of just 1%. This combination of efficiency and a robust servicing portfolio positions Mr. Cooper Group Inc. (NASDAQ:COOP) well to capitalize on growth opportunities in the mortgage servicing sector.
Omega Advisors, Inc. has 2,860,600 shares of Mr. Cooper Group Inc. (NASDAQ:COOP), valued at $232,366,538.
Diamond Hill Select Strategy stated the following regarding Mr. Cooper Group Inc. (NASDAQ:COOP) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon, Texas Instruments and Mr. Cooper Group Inc. (NASDAQ:COOP). Mortgage-servicing company Mr. Cooper Group is benefiting from a high interest-rate environment, which is supporting increased profitability in the mortgage-servicing business.”
While we acknowledge the potential of Mr. Cooper Group Inc. (NASDAQ:COOP), our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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