Compass Point Reiterates a 'Buy' on Newcastle Investment (NCT); 2012 Starts Strong

Compass Point reiterates a 'Buy' on Newcastle Investment (NYSE: NCT) price target of $9.00.

Analyst, Jason Stewart, said, "NCT reported solid 1Q12 results and considerable progress acquiring additional excess MSRs. The company reported $0.33 of core earnings, in line with our estimate and ahead of the street consensus of $0.29. GAAP EPS of $0.68 was boosted by gains from investments, the extinguishment of CDO debt and other non-cash items. Legacy CDOs continue to produce consistent cash flow, initial excess MSR investments are outperforming original return expectations and the company continues to make progress capitalizing on excess MSRs for sale in the market. NCT's relationship with a quality servicer such as Nationstar (NYSE: NSM)(NotCovered) remains a key competitive advantage and one that we expect will result in a higher success ratio in competitive bidding and stronger returns to NCT. Clearly, NCT's relationship with Fortress (NYSE: FIG)(Buy, $6 PT) and NSM was instrumental in putting together a holistic bid for the ResCap assets. We expect the company to announce a commitment to close on one additional portfolio in the coming week."

For an analyst ratings summary and ratings history on Newcastle Investment click here. For more ratings news on Newcastle Investment click here.

Shares of Newcastle Investment closed at $7.14 yesterday.

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