Onity Group: Buybacks Protect The Downside While Servicing Recovers (Upgrade)

2026-07-02 00:39:45 ET

Thesis Review

Onity Group ( ONIT ) is one of the few names I have covered that have taken me through an emotional rollercoaster. When I wrote my first article , I was attracted by the discounted valuation of its asset base. At the time of my writing, there was a 50% discount on its book value. I didn't look much into details on what was driving the discount, so purely on that and meager fundamentals, I rated it a buy. This was more than a year ago, and the stock has appreciated by 36%, underperforming the S&P 500, which returned 40%. Seeing the intense volatility the stock was experiencing and the macro headwinds that were pressuring top-line growth while leverage was spiking, I wrote a third article , downgrading it to a sell. The stock is only up 11% since the last article and in line with the S&P return....

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