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ASPS - Altisource


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Guest roark33

By big names, I meant, in size, they owned this.  Cooperman, Luxor and NB, almost owned 30% of the float, then Erbey another 30%.  So that was my point--and I wasn't saying that this was a good thing. 

 

I think the idea that no one could know that Ocwen would endure regulatory scrutiny is also off-base.  The first thing I did when reading about Ocwen was read their historical financials.  They already had their ability to buy NPLs suspended in the 1990s and effectively gave up their banking license because of prior regulatory troubles. 

 

 

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Another sale by OCN:

http://seekingalpha.com/news/2387516-ocwen-selling-more-msrs-to-nationstar-nyse-warns-on-delisting

 

So up until now, the sales of MSRs on GSE mortgages have been:

- 81k to Nationstar

- 56k to Walter

- 277k to JPMorgan

for a total of 414k.

 

I'm tracking this to compare it to Altisource's assumptions - between 300k and 600k of offloading this year.

 

This is not very material overall, since non-GSEs bring in the lion's share of the revenues. But the accuracy of the management's predictions is highly material.

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  • 2 weeks later...

Anyone have thoughts on the popularity of their owners.com site?

 

There is a big thread on biggerpockets.com re. Hubzu. in which individual investors compare notes on the bidding process and so on. Some reviews are negative but a lot of them are neutral to positive. Makes me think that site may be more valuable than some posters suggest, and may have an intrinsic value beyond the association with Ocwen. Trying to analyze both hubzu and owners.com should be fun!

 

 

 

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Replying here instead of in the OCN thread:

Now that OCN remaining servicer is in writing, does this mean ASPS might resume buybacks?

I would hope so!

 

Also, there's a resolution pending to allow a buyback of up to 15% of outstanding shares (IIRC, that's the maximum allowed under Luxembourgian law). The annual meeting is May 20.

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  • 2 weeks later...

Thinking aloud here... it could be a real problem if the monitor appointed by the NY DFS finds fault with Altisource's fees for default-related services.

 

One possibility:

Lawsky seems to have the worldview that capitalism is evil and that capitalists make money by doing things that they shouldn't.  He's clearly a fan of pre-emptive regulations, e.g. Bitcoin.  I don't know if he will find fault with Altisource's fees.

 

The monitor has a different set of incentives.  Firstly, they don't want to get fined by the NY DFS (the NY DFS set an unusual precedent by severely punishing bad monitors).  I think that the monitor will create a set of benchmarks that are very onerous.  Lawsky has a history of not caring about the unintended effects of regulations and how regulations might stifle innovation.  His Bitcoin regulations will likely stifle innovation as many companies will choose not to operate in New York.  He temporarily shut down Lyft and RelayRides.  The safe thing for the monitor to do is to raise the bar on regulation.  If Ocwen flies with flying colours, then it would look bad on the monitor because it might look like the monitor is helping Ocwen be evil.

 

To some degree, the current regulations on mortgage servicing are extremely capitalism-unfriendly especially in New York.  It takes several years to foreclose on a delinquent borrower.  I'm not sure where else the monitor could make benchmarks to make life more difficult for Ocwen.  They might get tougher on servicing transfers and credit reporting, where there are currently few regulations.

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Amusingly, ASPS bought HLSS stock this quarter - no doubt following NRZ's announcement, with the intention of blocking a sale/merger without strings attached. So they registered a loss on the investment since they'll sell it at the lower agreed price...

 

Other than that, the EPS number (with amortization added back) was pretty decent. Or rather, it promises to become decent in the next quarters, when the expenses related to shrinking the business will be over.

 

edit: also, the EPS is boosted by the fact the number of diluted shares went way down since the end of 2014. Probably some stock options expiring, since the buybacks were small.

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  • 2 months later...

I thought they won the HSBC contract a while ago.

If you read the conf call transcript, it seems to me that it is a new contract with a "top 10 bank". With perhaps less volume than the existing (HSBC) one, but a more diversified revenue stream.

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  • 2 months later...

Anyone listen to / read the conf call today? Maybe I just missed it in prior presentations, but I was surprised how aggressive some of their growth forecasts are for 2016 (p 21):http://files.shareholder.com/downloads/ABEA-32801L/749000078x0x855772/68E927AB-42D1-4442-93C5-34BD3ED61F77/Quarterly_earnings_slides_9-30-15_v32.pdf

 

Otherwise it seemed fairly mediocre. Looked like the shares popped based on the headline numbers but then one people really got to dig into the numbers they sank.  I find a lot of their metrics difficult to digest because they don't split out Ocwen vs non-Ocwen. I couldn't find much that indicated forward progress or that their new customers are really adding much. A lot of their initiatives (Hubzu, Lenders One) showed negative progress.

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Anyone listen to / read the conf call today? Maybe I just missed it in prior presentations, but I was surprised how aggressive some of their growth forecasts are for 2016 (p 21):http://files.shareholder.com/downloads/ABEA-32801L/749000078x0x855772/68E927AB-42D1-4442-93C5-34BD3ED61F77/Quarterly_earnings_slides_9-30-15_v32.pdf

 

Otherwise it seemed fairly mediocre. Looked like the shares popped based on the headline numbers but then one people really got to dig into the numbers they sank.  I find a lot of their metrics difficult to digest because they don't split out Ocwen vs non-Ocwen. I couldn't find much that indicated forward progress or that their new customers are really adding much. A lot of their initiatives (Hubzu, Lenders One) showed negative progress.

 

They are ahead of their low end scenario and its only Q3. Hard to say they aren't having a good year. It's also trading at a ridiculous P/E.

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Anyone listen to / read the conf call today? Maybe I just missed it in prior presentations, but I was surprised how aggressive some of their growth forecasts are for 2016 (p 21):http://files.shareholder.com/downloads/ABEA-32801L/749000078x0x855772/68E927AB-42D1-4442-93C5-34BD3ED61F77/Quarterly_earnings_slides_9-30-15_v32.pdf

 

Otherwise it seemed fairly mediocre. Looked like the shares popped based on the headline numbers but then one people really got to dig into the numbers they sank.  I find a lot of their metrics difficult to digest because they don't split out Ocwen vs non-Ocwen. I couldn't find much that indicated forward progress or that their new customers are really adding much. A lot of their initiatives (Hubzu, Lenders One) showed negative progress.

 

They are ahead of their low end scenario and its only Q3. Hard to say they aren't having a good year. It's also trading at a ridiculous P/E.

 

They commented on it briefly, but it looks like most of their beat has been due to higher revenue per delinquent loan on the non-GSE ocwen portfolio (up from $438 to $565 year over year). Any thoughts on what's driving that?

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They are ahead of their low end scenario and its only Q3. Hard to say they aren't having a good year. It's also trading at a ridiculous P/E.

 

If we look at the downside and assume OCN is in run off mode, is P/E not very meaningful and DCF more appropriate?

 

Yes. SOTP using multiple approach on non-OCN revenue I guess.

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  • 4 months later...

http://ir.altisource.com/releasedetail.cfm?ReleaseID=957812

 

LUXEMBOURG, Feb. 29, 2016 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. ("Altisource" or the "Company") (NASDAQ:ASPS) today announces preliminary fourth quarter and full year 2015 results, capping off a year of strong performance with 2015 service revenue of $940.9 million, the best in the Company's history.  The Company's preliminary 2015 diluted earnings per share, assuming the $80 million high end of the non-cash impairment charge described below, is estimated at $1.63.  Adjusted diluted earnings per share(1) for 2015 is anticipated to be $6.96, near the high end of the Company's 2015 financial scenarios

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  • 2 months later...

don't own this and stopped following whole "complex" after it ran into difficulties and I could not predict the outcomes with any probabilities, i.e. in the too hard pile, but Leon Cooperman (still) recommends it, as in he is talking his own book.  FWIW

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  • 11 months later...
I am getting marketed pretty hard by Fidelity's Fully Paid Lending Program to lend my shares for a 35% annual return.  Anybody have any thoughts on this?

 

Borrow is 140% (not a typo).

 

Been over 100% for a week.

 

Ask Fidelity for more of a cut.

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I bought this two years ago along with OCN and forgot all about it until I saw Devaney's article and one of the biggest short squeeze going on. I have it in my IB account and they haven't approached me. Maybe they are lending by default.

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  • 2 years later...
Guest roark33

Kuppy is an idiot, ASPS's servicing business is in decline because Ocwen's business is basically in runoff, a recession, with an increase in delinquincy won't change that. 

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Kuppy is an idiot, ASPS's servicing business is in decline because Ocwen's business is basically in runoff, a recession, with an increase in delinquincy won't change that.

 

Aren't they already ticking up? Is OCN structurally unable to add to its MSRs? Stopped looking at these years ago.

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