ASPS - Altisource

[Liberty]

I guess we now know why the borrows were so high recently. ASPS is also getting hit by the OCN suit (-37% right now):

http://nccob.gov/public/docs/News/Press%20Releases/OcwenOrder17_025.pdf

[NewbieD]

http://adventuresincapitalism.com/2019/08/12/altisource/

Trying to read up on this. Any bear-case refelections?

[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. 

[peridotcapital]

Not to mention that the last recession was unique in terms of the volume of mortgage delinquencies. In that realm, is the next recession more likely to be like 2008, or more run of the mill a la the early 2000's and the early 1990's...

[Gordon Gecko]

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.

[peridotcapital]

http://adventuresincapitalism.com/2019/08/12/altisource/

Trying to read up on this. Any bear-case refelections?

I just reread his post and realized that he is using TTM operating income figures, which include earnings from businesses they have now sold. I was trying to figure out why he thought they can do 100M+ pre-tax next year (50% above 2019) when the company itself is guiding to flat results year over year. All of the savings that Kuppy added back are simply going to offset the decline in the OCN business and the divisions that were sold.

Now, the stock is still cheap even if FCF is 60M instead of 100M, but that has been the case forever because the business is not growing. So you need a catalyst and Kuppy says it is a surge in RE defaults in 2020. I don't see any reason to believe that will happen, but it would get the stock moving for sure.