UWMC - Mid to Long-term return to fair value

Throwing this thread together ad-hoc. I’m gonna update as I actually get my DD together but in the meantime here’s a thread.

UWMC is a wholesale mortgage lender based out of Michigan, and their balance sheet is grande.

Current option chain for 18 Mar.
As you can see those 5c are of high interest, heavily outweighing any put OI. Stock has experienced a downtrend for months now despite smashing earnings Q3 2021. Earnings Q4 and full-year 2021 is tomorrow morning, 1 Mar. An earnings beat is highly anticipated.

If you’re privy to reddit you know that this ticker is of high interest. Shorts are keeping it down but the leadership is very keen on getting it back up to IPO levels.

Could be risky considering earnings plays; here’s the thing though, the calls are DIRT CHEAP. I rolled some RSX profits into 5c 18 Mar x5.

Will add more in a bit, I’m at work dammit. Feel free to shit on this in the mean-time, I know it has been a reddit meme ticker but I see some serious value this year as mortgage rates continue to hike.


Are you worried about their guidance? Home sale numbers are down, so their guidance might be reduced due to that.

Also, I think rising interest rates would be bearish for a mortgage firm. There will be less people refinancing. I’ve seen some articles suggesting higher rates are associated with fewer home sales.


Threw in 20x 5c calls for march 18. Goodluck


Thanks for the questions. Home sales are actually expected to reach decade highs this year despite low inventory. I’m in an insane local housing market, and I’m seeing bidding wars on even the least desirable properties. People are trying to get into homes and a lot of them don’t seem to care that they’re paying 20% above asking.

Private real estate investors are doing their part in sustaining this low inventory, but developers continue expanding at increasing rates. Permits issued at increasing volumes, construction companies fast tracking new housing developments. Demand remains at all time highs. Millennials don’t want to live in apartments or with their parents anymore. Lenders are in a very interesting position with current market sentiment, and UWM’s CEO Mat Ishbia has communicated some very strong expectations for Q4 2021 and going into 2022, specifically during his Q3 earnings call.

I’ll be honest I’m very new to the discourse and lingo surrounding the housing market (and by extension, lenders), but what’s clear to me is that UWM has become a top lender for the nation in record time since Mat’s transition to CEO, and he has very public ambitions to take that beyond a 20% market share. I’ve found some better DD than I can provide on reddit that I’ll probably just end up x-posting here. Still at work and will follow up shortly.


rip. xD

Dividend yield almost 10% now with this dip.

Note: RKT also missed top and bottom and is now trading 20% higher.

Is there a bear case for much lower on UWMC? I have been watching this for a while and it always does a V shape bounce back on large dips like this, albiet with an overall downtrend.

Thinking to buy in size here.

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I got 5c march 18 calls tho. Dividend that. :laughing:

For perspective russian junk bonds yield 12.8%

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Yeah I think the bear case for a fall below $4.00 is pretty weak. I mentioned my call purchases because I was confident they’d make earnings and they missed. Shit happens, which is why I don’t like playing earnings. Nonetheless I see this as an excellent opportunity to average down on shares and purchase leaps. UWMC isn’t staying at $4.00 - $5.00 this year, and this bottom is disingenuous to the fair value of UWM.

That being said, a lot of money is being made elsewhere on the market right now, so if anything I think this ticker’s place on my portfolio is a passive dividend payout and a place I can throw a couple hundred bucks into shares as it continues to find its bottom (which, again, is way lower than it has any business being rn). Their market cap does not deserve to be 6.64b, and their PE ratio of ~0.3 is criminal. Like the title states, mid to long term hold here. Thanks.

Figured I’d post some of the earnings highlights from this morning. Originally posted by /u/MinMadChi

Full Year 2021 Financial Highlights

  • Originations of $226.5 billion in 2021, a 24% increase from $182.5 billion in 2020
  • Purchase originations of $87.3 billion in 2021, a 103% increase compared to $42.9 billion in 2020
  • Net income of $1.6 billion in 2021 inclusive of a $587.8 million decline in fair value of MSRs, as compared to $3.4 billion of net income in 2020 inclusive of $573.1 million of expenses related to amortization, impairment, and payoffs of MSRs
  • Total gain margin of 114 bps in 2021 compared to 249 bps in 2020
  • Largest wholesale mortgage lender in the U.S. by closed loan volume seven years in a row, with approximately 31%2 market share of the wholesale channel for the year ended December 31, 2021
  • Total equity of $3.2 billion at December 31, 2021 as compared to $2.4 billion at December 31, 2020
  • Unpaid principal balance of MSRs increased to $319.8 billion with a WAC of 2.94% at December 31, 2021 as compared to $188.3 billion with a WAC of 3.13% at December 31, 2020
  • Through December 31, 2021, shares of Class A common stock repurchased by the Company totaled 11,498,330 for $81.6 million, at an average price per share of $7.10

Thank you for all of your input here. Just sold a large position of 03/18 $5C for +100%.

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As of 0911 PST, those Mar 18 5c I have at a .06 basis are now +89%
Looks like the earnings call didn’t do much to staunch the expected reversal sentiment. @SADO, I hope you didn’t sell at a loss man! Now’s a good time to take some gains if any of you are still in this play.


I am out of this position at about a +121% gain. I put a limit sell for .13 and it filled at .14 almost instantly.

Now is a fantastic time to exit most if not all of your positions, even if your basis was higher than my own.


Unfortunately I did. Tbh it was total gamble with small position for me, so when it did not go my way I cut losses as I planned I would. Looking at it now, if I would have bought after ER, it would have been 200% gain now. Good call, looking forward to the next one. :wink:

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Thank you for the call outs and DD, was a nice return here after I averaged down after ER. Was thinking about hanging on to a few just to see if it would ride up, but decided to take profits here as the last few were sitting steadily over 200%. My goal currently is to continue being disciplined with exiting positions intelligently and not letting greed ruin gains.


Thanks for sharing your results!

I’ll be honest, I’m pleasantly surprised that the callout attracted more than maybe a couple of people. I’m glad that the result of the play is trending towards “I made some money”. I was worried people wouldn’t hold through earnings despite the oversold indicators!

I hope to keep this thread updated over time given it is more of a mid-long term play. Feel like I will learn a lot by trying to refine my DD on the topic.

I know the short term leg of this is pretty much done, but I want to call attention to the original intent of the thread: UWMC being consistently oversold and undervalued since its IPO. It has to turn around eventually, and despite an underwhelming 2021 and Q4 (compared to '20), they are still a profitable company with a share price that is irrespective of fair value.


I re-entered, this time in somewhat of a gamble position, getting .02 and .03 fills for $5.5 03/18 - I may just scalp them, but I’m liking the movement and volume this week.

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Hopped into some 5.5c for the 18th as well. Pretty cheap bet, only 10 contracts at .2 a pop.

Looking to enter into a 6 month leap or two here. Gonna see how open looks tomorrow.

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Wanted to hop on to remind our lovely community members of UWMC’s $0.10 dividend tomorrow. This was one of the things they had mentioned on that 4Q earnings call as being preserved despite missing overall. I’m a bit heavier on cash at the moment than usual thanks to getting out of WEAT, so I’m considering loading up on a few hundred additional shares to make the dent of WEAT hurt a little less. Downside risk is pretty minimal given the support we’ve seen at $4.00, and a glance at the daily chart shows a consistent sideways trend. Could be a good time to get in given the red today, lower your basis through tomorrow, and get out with an easy ~2.5% gainer.

Let me know your thoughts

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Got a fill on 200 shares at $4.37.
After the dividend tomorrow that basis goes down to $4.27 a share. Looking to scalp a green candle too, though might end up holding longer-term if I like what I see tomorrow. Main goal in getting out is not to drop the play entirely-- I still have 200 other shares at a higher basis – just wanting to be liquid enough to follow a couple Challenge plays here and there.


Just for clarification, tomorrow is the ex-div date. Payout is 04/11.

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