EW YORK (TheStreet) -- Shares of Home Loan Servicing Solutions (HLSS) plunged more than 35% to a 52-week low of $9.83 in sympathy with peer company Ocwen Financial (OCN) .
Ocwen also plummeted Tuesday on reports that California wants to suspend the payment collection company's mortgage license because of its failure to produce documents that prove it complies with California's homeowner protection laws, according to the Los Angeles Times.
The state accused Ocwen of defying requests made by the California Department of Business Oversight, which handles licensing of non-bank mortgage lenders, along with collection and foreclosure services.
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Home Loan Servicing Solutions also announced a monthly dividend of 18 cents on Monday. Shareholders of record on Friday, January 30 will receive a dividend of 18 cents a share on Tuesday, February 10. The ex-dividend date is Wednesday, January 28.
TheStreet Ratings team rates HOME LOAN SERVICING SOLTNS as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HOME LOAN SERVICING SOLTNS (HLSS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, attractive valuation levels, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
The revenue growth greatly exceeded the industry average of 21.8%. Since the same quarter one year prior, revenues rose by 22.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, HOME LOAN SERVICING SOLTNS's return on equity exceeds that of both the industry average and the S&P 500.
The gross profit margin for HOME LOAN SERVICING SOLTNS is currently very high, coming in at 95.98%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 50.58% significantly outperformed against the industry average.
HOME LOAN SERVICING SOLTNS has improved earnings per share by 25.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HOME LOAN SERVICING SOLTNS increased its bottom line by earning $2.22 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($2.66 versus $2.22).
You can view the full analysis from the report here: HLSS Ratings Report
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