Here’s Why You Should Consider Investing in PennyMac Financial Services (PFSI)

Gator Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 6.94% was recorded by the fund for the fourth quarter of 2021, compared to its benchmarks, the S&P  500 Total Return Index that delivered an 11.03% return, and the S&P 1500 Financials Index that had a 4.77% gain for the same period.  Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Gator Capital Management, in its Q4 2021 investor letter, mentioned PennyMac Financial Services, Inc. (NYSE: PFSI) and discussed its stance on the firm. Founded in 2008, PennyMac Financial Services, Inc. is a Westlake Village, California-based residential mortgage company with a $3.0 billion market capitalization, and is currently spearheaded by its CEO, David A. Spector. PFSI delivered a -20.62% return since the beginning of the year, while its 12-month returns are down by -15.69%. The stock closed at $55.39 per share on March 11, 2022.

Here is what Gator Capital Management has to say about PennyMac Financial Services, Inc. in its Q4 2021 investor letter:

“Although higher interest rates will benefit the Fund’s portfolio, we are making sure that the Fund is not simply a bet on higher rates. We have several large holdings with inexpensive valuations and catalysts unrelated to higher interest rates. PennyMac Financial Services (PFSI), a well-run mortgage bank, trades at 4x earnings, less than 1x tangible book value, and has repurchased 24% of its shares in the last 18 months.”

Photo by Breno Assis on Unsplash

Our calculations show that PennyMac Financial Services, Inc. (NYSE: PFSI) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PFSI was in 28 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 33 funds in the previous quarter. PennyMac Financial Services, Inc. (NYSE: PFSI) delivered a -19.67% return in the past 3 months.

In September 2021, we published an article that includes PFSI in the 5 Biggest Mortgage Companies in the US. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.