NEW BEARISH Plays
Altisource Portfolio Solutions - ASPS - close: 26.94 change: -1.96
Stop Loss: 30.05
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on January -- at $---.--
Listed on January 12, 2015
Time Frame: exit prior to earnings in mid February
Average Daily Volume = 473 thousand
New Positions: Yes, see below
Why We Like It:
ASPS is part of the services sector. They provide a host of services to the mortgage, real estate, and financial industries; including collections, payments and servicing non-performing residential mortgage loans. According to a company press release, "Altisource Portfolio Solutions S.A. is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. Altisource leverages proprietary business process, vendor and electronic payment management software and behavioral science based analytics to improve outcomes for marketplace participants."
The stock saw tremendous rise from its beginning back in 2009 near $6.00 a share. By December 2013 ASPS was trading above $170.00. That proved to be a peak. It's been a long and painful decline. ASPS is associated with Ocwen Financial (OCN). It looks like ASPS was spun off from OCN years ago. They are both financial services companies. Both are probably affected by government investigations. OCN was hit with an investigation by the U.S. Consumer Financial Protection Bureau (CFPB) and was handed a $2.1 billion fine from the government. Meanwhile ASPS has been dealing with an investigation from regulators in New York. At the same time earnings for ASPS have been volatile. After big beats earlier in 2014 their most recent earnings report, on October 23rd, was a big miss. Analysts have started downgrading the stock.
Investors are bearish too. The most recent data listed short interest at 23% of the very small 10.6 million share float. With that much short interest it does raise the risk of a short squeeze.
Technically ASPS looks terrible. The recent sideways consolidation has failed and ASPS just broke down to new multi-year lows. Tonight we're suggesting a trigger to open bearish positions at $26.45.
Trigger @ $26.45
- Suggested Positions -
Short ASPS stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the FEB $25 PUT (ASPS150220P25) current ask $3.60
Option Format: symbol-year-month-day-call-strike