PHH Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mortgage and fleet-management company PHH (NYS: PHH) had a nice tailwind today, gaining as much as 15% in intraday trading after a hedge fund revealed a large new stake in the stock.

So what: For many investors, the names Hayman Capital and Kyle Bass may not mean a whole lot. But for those invested in, or even just interested in, PHH, those names are the key today. Just a week ago, PHH's shares were swooning on the company's plans to sell new debt. Today, they're doing exactly the opposite after Bass' hedge fund Hayman revealed that it's snapped up a 7.9% stake in PHH.

In short, Bass is a tack-sharp money manager who made oodles of money betting against the financial world ahead of the housing meltdown and financial crisis. And now he's taken a position in mortgage company PHH? You better believe that's interesting.

Now what: As smart as Bass may be, he's still just one investor and there's still the possibility that he could be very wrong on this one -- lest we forget John Paulson's epic 2011 meltdown. For that reason, it's probably a bad idea to rush to buy PHH today simply because Bass has jumped in. This could, however, be a good excuse for investors that had the stock on their radar to tune in more carefully to see if they can figure out what Bass found so appealing.

Want to keep up to date on PHH?Add it to your watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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