Altisource Portfolio Solutions (ASPS) is in the mortgage business. With the current economy, business is good. Very good. That’s why ASPS has shot higher. The only blemish is ASPS just missed estimates, and next quarter’s guidance got cut. Other than that, the outlook is good.
One Year Chart
Not getting into ASPS was one of my top misses during the last year. This is a tough company to value. It’s in the real estate business but I’ve had trouble grasping exactly how ASPS makes its money.
ASPS also has missed estimates in the past, that made me a little leery of the stock. It missed in 2009 Q4 buy 9 cents, 2010 Q3 by 20 cents, 2011 Q1 by 2 cents and 2011 Q2 by 13 cents before missing again last quarter. Unfortunately my undercover work that found these details also kept me out of the stock since around $40.
Fair Value
I feel this stock is worth 20 times earnings. ASPS is undervalued and is one stock I’m considering buying.
I also want to poiunt out there is no 2014 earnings estimate. This company is based in Luxembourg, which is a ways away. There’s not much analyst research on the stock. All this makes me a big uneasy.
Sharek’s Take
Yes, ASPS is a good stock and I could buy in here, but I feel the miss last quarter has taken some steam out of the shares. I don’t think the stock will shoot higher this quarter now that momentum has subsided. I really don’t like the straight-up move the stock made this year and feel ASPS has a chance to crash on profit taking. If that happens it could be my second chance to get in.
View the Earnings Table here.View the Ten Year Chart here.
