Walter Investment Management finally parted the dark clouds hanging over it in the first quarter. Larry Pitkowsky, portfolio manager for the GoodHaven fund, said its blue skies for the mortgage servicing company from here on in. ‘They had strong earnings. They sold non-core assets. They put in a stock buyback authorization. And higher interest rates are better for mortgage servicing earnings,’ said Pitkowsky. ‘And by the way there is a little bit of a short squeeze going on there.’ Shares of Walter Investment Management have fallen 24% in the past year, but have jumped 39% in the past 3 months. Pitkowsky said Walter is a good example of the type of temporarily downtrodden companies he seeks out at the GoodHaven fund. The GoodHaven Fund has dropped 20% in the past 12 months, yet has jumped 4% in the past 3 months. ‘We are trying to put together a portfolio of companies where there is a lot of upside and not a lot of downside and that means wading into areas where they are unpopular currently,’ said Pitkowsky. Another company high on Pitkowsky’s list is WPX Energy. Shares of the Tulsa, Oklahoma-based driller collapsed with oil prices last year, but have made a strong 19% comeback in the past 3 months as energy prices have stabilized.
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