The Best of Kass
Among his posts this past week, Kass discussed how Ocwen plans to reduce its taxes significantly, some economic warning signs on the manufacturing front and why the market could be headed for a top.
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Heading to the Islands
Originally published on Thursday, Aug. 16 at 11:21 a.m. EDT.
In an 8-K filing today, Ocwen(OCN) has outlined a new five-year support services agreement with Altisource(ASPS) . (This replaces the transition agreement that occurred right after the spin out in 2009.)
This was expected.
The more interesting disclosure was that Ocwen's mortgage servicing is now mentioned as a Virgin Islands corporation (previously it was Florida-based). This is consistent with the company's comments on the second-quarter conference call the the corporation's effective tax rate would drop significantly. But it has happened sooner than previously expected.
This will allow OCN to reduce its effective tax rate to close to 10% from the current rate of 34%.
If effected for all of 2013, this would add about 65 cents a share to the full-year estimate.
At the time of publication, Kass was long OCN.
Originally published on Thursday, Aug. 16 at 10:36 a.m. EDT.
Yesterday, I mentioned that we have to watch the regional manufacturing data closely for August after New York's weak data yesterday.
Today's Philly print at -7.1 (the fourth-consecutive negative monthly read) should give some that are expecting an acceleration in the rate of growth some pause. Backlogs were down, as was the average workweek. Prices paid were higher.