UPDATE: Oppenheimer Initiates Coverage on Walter Investment Management Corp. with Perform Rating on Valuation, Lack of Earnings Consistency

In a report published Tuesday, Oppenheimer analyst Ben Chittenden initiated coverage on Walter Investment Management Corp. WAC with a Perform rating. In the report, Oppenheimer noted, “We are initiating coverage of Walter Investment Management (WAC) with a Perform rating. WAC has spent the last few years acquiring all the right assets to take advantage of the secular shift taking place in the mortgage finance space. It's now the ninth largest servicer in the country with a $215B servicing portfolio and $320B pipeline. It has a ramping originations business where volume gains should help offset some of the gain-on-sale margin compression. WAC also has a reverse mortgage platform and tangential businesses in insurance and asset receivables management. There are two things that hold us back from recommending the stock: 1) so far we haven't seen a consistent earnings trajectory from the acquisitions and 2) valuation.” Walter Investment Management Corp. closed on Monday at $40.36.