Posts tagged ‘walker & dunlop’

Aug 11

Walking through my Mistakes with Walker and Dunlop

With the earnings plate of stocks I own full to the brim, it was a bit of a tough week to be away. The consequence was that I was not able to review many of the reports and conference calls until this weekend, and in a few cases the stocks suffered significant drops in the interim.

This was the case for Walker & Dunlop, the commercial mortgage originator that I’ve owned for the last four months. In my original and follow up post on the company I described the investment thesis as being based in part on the continuation of their history of growth as a multi-family lender, and in part based on their relatively recent relationship with Fortress Investment Group, who I expected to open a few new doors for the company.

One door was opened in the first quarter with the initiation of an $850 million bridge lending program aimed at borrowers who would eventually qualify for Fannie, Freddie, CMBS or HUD channels. This is a solid step for the company as it opens up another destination for its originations, but at 8% of loan volumes its not a game changer. Read more

Apr 7

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Getting Comfortable with Walker and Dunlop

I was originally put on to the idea of Walker & Dunlop (WD) by a reader of the blog back in September (while I will leave the name of that tipster anonymous, many thanks for the idea). The call was prescient and I can only wish I had made my purchases sooner.

As it was, I initiated a position in Walker & Dunlop about 4 weeks ago, doing so after the stock had fallen 10% from its 52 week high of $21.76. Unfortunately that turned out to be at least $2 too soon.

The stock has subsequently fallen further. As usual being wrong has compelled me to re-evaluate my thesis, which I did this week. After some waffling I have decided not only to hold on to the position but add to it, which I did on Thursday and again on Friday.

What they do

Walker & Dunlop is the commercial lending equivalent of Nationstar Mortgage. Their business is the origination and servicing of commercial mortgage loans. The vast majority of those loans are multi-family and are passed along to Fannie Mae, Freddie Mac or into HUD insured Ginnie Mae securities. The company generates revenue from origination fees and on the servicing of its loans. They are the eighth largest originator of commercial mortgage loans in the United States, and the second largest originator of multi-family loans.

Extending the analogy to Nationstar, Walker & Dunlop recently acquired its fellow commercial originator CWCapital from Fortress Investment Group, who became a large shareholder after acquiring 11.6 million shares as part of the sale. Read more